12 April 2018 Westfield Corporation Level 29 85 Castlereagh Street The Manager Sydney NSW 2000 Company Announcements Office GPO Box 4004 Sydney NSW 2001 ASX Limited Australia Level 4, Exchange Centre Telephone 02 9273 2000 20 Bridge Street Facsimile 02 9357 7131 SYDNEY NSW 2000 Internet www.westfieldcorp.com
Dear Sir/Madam
WESTFIELD CORPORATION (ASX: WFD) ONEMARKET DEMERGER BOOKLET
Please see attached the securityholder booklet in relation to the proposed demerger of OneMarket.
Yours faithfully WESTFIELD CORPORATION
Simon Tuxen Company Secretary
Encl.
Westfield Corporation Limited ABN 12 166 995 197 Westfield America Management Limited ABN 66 072 780 619 AFS Licence 230324 as responsible entity of Westfield America Trust ABN 27 374 714 905 ARSN 092 058 449 and as responsible entity of WFD Trust ABN 50 598 857 938 ARSN 168 765 875
WESTFIELD CORPORATION
PROPOSAL FOR THE DEMERGER OF ONEMARKET LIMITED FROM WESTFIELD CORPORATION ONEMARKET DEMERGER BOOKLET PROPOSAL FOR THE DEMERGER OF ONEMARKET LIMITED FROM WESTFIELD CORPORATION VOTE IN FAVOUR
The Westfield Directors unanimously recommend that youvote in favour of the resolutions to approve the Demerger Scheme and related Capital Reduction The Independent Expert has concluded that the Demerger is in the best interests of Westfield Shareholders
This is an important document and requires your immediate attention. You should read this Demerger Booklet in its entirety, taking particular notice of the advantages, disadvantages and risks of the Demerger and the risks of an investment in OneMarket Limited before deciding whether or not to vote in favour of the Demerger. If you are in doubt as to what you should do, you should consult your legal, financial or other professional adviser. Westfield has established a Shareholder Information Line which you should call if you have any questions in relation to the Demerger. The telephone number for the Shareholder Information Line is 1300 132 211 (within Australia) and +61 3 9415 4070 (outside Australia). The Shareholder Information Line is open between Monday and Friday from 9.00am to 5.00pm.
Financial adviser Legal adviser Westfield Corporation Limited (ABN 12 166 995 197) IMPORTANT NOTICES
General Scheme Court Neither the US Securities and Exchange Commission Westfield Shareholders are encouraged to read this The fact that under subsection 411(1) of the Corporations nor any securities regulator in any state in the United Demerger Booklet in its entirety before making a decision Act the Scheme Court has ordered that a meeting be States has reviewed this Demerger Booklet or approved as to how to vote on the Resolutions to be considered at convened and has approved the explanatory statement or disapproved the offer or sale of securities referred to the Meetings. required to accompany the notice of the meeting does in this Demerger Booklet. No securities referred to in this Purpose of Demerger Booklet not mean that the Scheme Court: Demerger Booklet will be listed for trading on a securities The purpose of this Demerger Booklet is to explain –– has formed any view as to the merits of the proposed exchange in the United States. the terms of the Demerger and the manner in which Demerger Scheme or as to how members should The Demerger Booklet is subject to disclosure the Demerger will be considered and implemented vote (on this matter members must reach their own requirements of Australia that are different from those (if approved), to provide certain information required decision); or of the United States. For example, the special purpose by law and to provide all other information (other –– has prepared, or is responsible for the content of, this financial statements and other historical financial than information previously disclosed to Westfield Demerger Booklet. information included in this Demerger Booklet have Shareholders) which is known to Westfield which An order of the Scheme Court under section 411(1) been prepared in accordance with the recognition and is material to the decision of Westfield Shareholders of the Corporations Act is not an endorsement by the measurements principles of Australian equivalents to whether or not to vote in favour of the Resolutions to be Scheme Court of, or any other expression of opinion by IFRS as issued by the IASB and IFRS as issued by the considered at the Meetings. the Scheme Court on, the Demerger Scheme. IASB relevant for income statements, statements of This Demerger Booklet includes: financial position and statements of cash flows with Status of this Demerger Booklet the exception of AASB 10 Consolidated Financial –– the explanatory statement required to be sent This Demerger Booklet is not a prospectus lodged under Statements. There are differences between such to Westfield Shareholders under Part 5.1 of the Chapter 6 of the Corporations Act. Section 708(17) standards and US generally accepted accounting Corporations Act in relation to the Demerger of the Corporations Act provides that disclosure to principles (U.S. GAAP), and these differences may be Scheme; and investors under Part 6D.2 of the Corporations Act is material. Additionally, the pro forma historical statement –– all the information known to Westfield that is material not required for an offer of securities that is made under of financial position included in this Demerger Booklet to Westfield Shareholders in deciding how to vote on a compromise or arrangement under Part 5.1 of the for OneMarket after giving effect to the Demerger may the Capital Reduction Resolution. Corporations Act, approved at a meeting held as a result not comply with the requirements for the preparation Westfield Shareholders should read this Demerger of an order made by the Scheme Court under section of pro forma historical statement of financial position Booklet in its entirety before making a decision as to 411(1) or (1A) of the Corporations Act. contained in Article 11 of Regulation S-X of the Rules how to vote on the Resolutions to be considered at the Foreign jurisdictions and shareholders and Regulations of the US Securities and Exchange Demerger Scheme Meeting and the General Meeting. Commission. The rules and regulations related to Ineligible Foreign Holders will not receive OneMarket the preparation of pro forma financial information Unibail-Rodamco Transaction Securityholder Booklet Shares under the Demerger. The OneMarket Shares to in the United States may vary significantly from the This Demerger Booklet is separate to, and does not which those shareholders would otherwise be entitled requirements applicable to the pro forma historical contain detailed information on, the Unibail-Rodamco under the Demerger will be transferred to the Sale Agent statement of financial position included in the Demerger Transaction. The Unibail-Rodamco Transaction is a to be sold on market, with the Sale Facility Proceeds Booklet. separate transaction, but the Demerger is conditional remitted to them, free of any brokerage costs or stamp upon the Unibail-Rodamco Transaction proceeding. duty. Refer to section 3.6 for further information. Participants in the Demerger (whether or not US persons) who are or will be affiliates (within the meaning of the US Detailed information about the Unibail-Rodamco Westfield Shareholders who are not tax resident in Securities Act) of Westfield prior to or after the Effective Transaction and relevant information about Westfield Australia should seek specific tax advice in relation to the Date may be subject to certain restrictions on transfers of is contained in the Unibail-Rodamco Transaction Australian and overseas tax implications of the Demerger. the OneMarket Shares received pursuant to the Schemes Securityholder Booklet which was sent to Westfield For a general discussion of the potential tax implications Demerger. Stapled Securityholders at the same time as this of the Demerger for Westfield Shareholders resident in Demerger Booklet. Westfield Stapled Securityholders Australia refer to section 7. The enforcement by investors of civil liabilities and other should read the Unibail-Rodamco Transaction rights under the United States federal securities laws This Demerger Booklet does not in any way constitute an Securityholder Booklet in its entirety. may be affected adversely by the fact that Westfield and offer of securities in any place in which, or to any person OneMarket Limited are incorporated or organised outside Responsibility for information to whom, it would be unlawful to make such an offer. This the United States, that some or all of their respective The information contained in this Demerger Booklet other Demerger Booklet may not be distributed to any person, officers and directors and the experts named in this than Annexure A and Annexure B has been prepared by and the OneMarket Shares may not be offered or sold, in Demerger Booklet are residents of a foreign country, Westfield and is the responsibility of Westfield. any country outside Australia and its external territories and that a substantial portion of the assets of Westfield and New Zealand, unless Westfield determines that it Grant Samuel & Associates Pty Limited has prepared the and said persons are located outside the United States. is lawful and not unduly onerous or impracticable to Independent Expert’s Report in relation to the Demerger As a result, it may be difficult or impossible for US transfer OneMarket Shares under the Demerger to such set out in Annexure A and takes responsibility for that securityholders to effect service of process within the Demerger Participants. Refer to section 3.6(a) for further report. United States upon Westfield, its officers or directors information on jurisdictions where Demerger Participants or the experts named in this Demerger Booklet, or to Ernst & Young Transaction Advisory Services Limited has will not be classified as Ineligible Foreign Holders. prepared the Independent Limited Assurance Report set realise against them upon judgments of courts of the out in Annexure B and takes responsibility for that report. Nominees, custodians and other Westfield Shareholders United States predicated upon civil liabilities under the who hold Westfield Shares on behalf of a beneficial federal securities laws of the United States or “blue sky” ASIC owner resident outside Australia, New Zealand, laws of any state within the United States. In addition, A copy of this Demerger Booklet was provided to Bahamas, Canada, France, Malaysia, Papua New US securityholders should not assume that the courts ASIC under section 411(2) of the Corporations Act Guinea, Singapore, South Africa, Switzerland and the of Australia: (a) would enforce judgments of United and registered by ASIC under section 412(6) of the United Kingdom may not forward this Demerger Booklet States courts obtained in actions against such persons Corporations Act. ASIC has been given the opportunity to (or accompanying documents) to anyone outside these predicated upon civil liabilities under the federal securities comment on this Demerger Booklet in accordance with countries without the consent of Westfield. laws of the United States or “blue sky” laws of any state section 411(2) of the Corporations Act. ASIC has been within the United States; or (b) would enforce, in original requested to provide a statement, in accordance with The distribution of this Demerger Booklet (electronically actions, liabilities against such persons predicated upon section 411(17)(b) of the Corporations Act, that ASIC has or otherwise) outside Australia may be restricted by law. civil liabilities under the federal securities laws of the no objection to the Demerger Scheme. If ASIC provides If you come into possession of this Demerger Booklet United States or “blue sky” laws of any state within the that statement, it will be produced to the Scheme Court (electronically or otherwise), you should observe any such United States. at the time of the hearing on the Second Court Date. restrictions and should seek your own advice on such Neither ASIC nor its officers take any responsibility for the restrictions. Any failure to comply with such restrictions Important notice to New Zealand investors contents of this Demerger Booklet. may contravene applicable securities laws. Refer to This Demerger Booklet is not a New Zealand disclosure section 8.13 for further information on restrictions in other document and has not been registered, filed with or ASX Listing foreign jurisdictions. approved by any New Zealand regulatory authority under OneMarket Limited has applied for admission to the or in accordance with the Financial Markets Conduct Official List and for Official Quotation of all OneMarket In particular, this Demerger Booklet has not been and Act 2013 (or any other relevant New Zealand law). The Shares on ASX. will not be registered under French securities laws or under any securities laws of any state of the European offer of OneMarket Shares under the Demerger is being A copy of this Demerger Booklet has been lodged with Economic Area or any state outside the European made to existing shareholders of Westfield Corporation in ASX. Neither ASX nor its officers take any responsibility Economic Area, except Australia and New Zealand. reliance upon the Financial Markets Conduct (Incidental for the contents of this Demerger Booklet. The fact that Offers) Exemption Notice 2016 and, accordingly, this ASX may admit OneMarket Limited to the Official List Any securities referred to in this Demerger Booklet Demerger Booklet may not contain all the information should not be taken in any way as an indication of the have not been and will not be registered under the US that a disclosure document is required to contain under merits of an investment in OneMarket Limited. Securities Act, or any state securities laws in the United New Zealand law. States, and any securities issued to persons in the United States or to, or for the account or benefit of, US persons Financial Information will only be made pursuant to a transaction that is not The basis of preparation and presentation of the financial required to be registered under the US Securities Act or information is as described in section 5.2. under applicable state securities laws. Investment decisions The forward looking statements in this Demerger Booklet Westfield and OneMarket websites This Demerger Booklet contains general advice only and reflect views held only at the date of this Demerger The content of Westfield and OneMarket’s respective has been prepared without reference to the investment Booklet. The forward looking statements do not reflect websites do not form part of this Demerger Booklet and objectives, financial situation and particular needs of the potential impact of any future acquisitions, mergers, Westfield Shareholders should not rely on their content. individual Westfield Shareholders or any other person. dispositions, joint ventures or investments OneMarket Supplementary information This Demerger Booklet should not be relied upon as may make. Subject to any continuing obligations Westfield has established a Shareholder Information the sole basis for any investment decision in relation under law or the ASX Listing Rules or as contemplated Line which you should call if you have any questions to Westfield Stapled Securities, Westfield Shares, under section 8.19, Westfield and OneMarket Limited or require further information. The telephone number is OneMarket Shares or any other securities. You should and their respective directors disclaim any obligations 1300 132 211 (within Australia) and +61 3 9415 4070 consider, with or without the assistance of a financial or undertaking to disseminate, after the date of this (outside Australia). The Shareholder Information Line adviser, whether the information in this Demerger Booklet Demerger Booklet, any updates or revisions to any is open between Monday and Friday from 9.00am to is appropriate for you in light of your particular investment forward looking statements to reflect any change in 5.00pm. Shareholders should consult their legal, financial needs, objectives and financial circumstances and expectations in relation to those statements or any or other professional adviser before making any decision consult your legal, financial or other professional adviser change in events, conditions or circumstances on which regarding the Demerger. before making any investment decision. any statement is based. In certain circumstances, Westfield may provide Forward looking statements Privacy additional disclosure to Westfield Shareholders in relation Certain statements in this Demerger Booklet relate to the Westfield and OneMarket Limited and their respective to the Demerger after the date of this Demerger Booklet. future. Forward looking statements generally relate to share registries may collect personal information in the To the extent applicable, Westfield Shareholders should future events or OneMarket’s future financial or operating process of implementing the Demerger and administering have regard to any such supplemental information in performance. In some cases, you can identify forward the shareholding arising from the Demerger. The personal determining how to vote in relation to the Demerger. looking statements because they contain words such information may include the names, addresses, contact as “may,” “will,” “shall,” “should,” “expects,” “plans,” details and security holdings of Westfield Shareholders Interpretation “anticipates,” “could,” “intends,” “target,’’ “projects,” and the names of persons appointed by Westfield Capitalised terms and certain abbreviations used in “contemplates,” “believes,” “estimates,” “predicts,” Shareholders as proxies, attorneys or corporate this Demerger Booklet have the meanings set out in “potential” or “continue” or the negative of these words representatives at the Meetings. The collection of some the Glossary at the back of this Demerger Booklet. or other similar terms or expressions that concern of this personal information is required or authorised by The documents reproduced in the Annexures to this expectations, strategy, plans or intentions. the Corporations Act. Demerger Booklet may have their own defined terms, which are sometimes different from those in the Glossary. Forward looking statements contained in this Demerger The primary purpose of collecting this personal Booklet include, but are not limited to, statements about: information is to assist in the conduct of the Meetings Unless otherwise stated, all data contained in charts, –– OneMarket’s future outcomes, including its revenue, and to enable the Demerger to be implemented in the graphs and tables is based on information available at the costs and profit; manner described in this Demerger Booklet and to date of this Demerger Booklet. All numbers are rounded unless otherwise indicated. –– the sufficiency of OneMarket’s cash, cash equivalents administer the shareholdings arising from the Demerger. and investments to meet its liquidity needs; The personal information may be disclosed to Westfield’s Unless otherwise specified, all references to $, US$ or and OneMarket Limited’s share registries, print and mail –– OneMarket’s ability to maintain the security and USD and cents are references to United States currency. service providers, authorised securities brokers and any availability of its internal networks and platform; Unless otherwise specified all references to A$, AUD and other service provider and adviser engaged by Westfield, Australian cents are references to Australian currency. –– OneMarket’s ability to quickly increase its number of OneMarket Limited or their respective share registries for customers and retain its existing customers; this purpose. Some of these recipients may be located in All references to times in this Demerger Booklet are –– OneMarket’s ability to effectively manage its growth overseas countries. references to Sydney time, unless otherwise stated. and future expenses; If the information outlined above is not collected, Estimates –– OneMarket’s ability to develop, maintain, protect and Westfield and OneMarket Limited may be hindered Unless otherwise indicated, all references to estimates enhance its intellectual property and its products; in, or prevented from, conducting the Meetings and and derivations of the same in this Demerger Booklet –– OneMarket’s ability to comply with modified or new implementing the Demerger. are references to estimates by Westfield management laws and regulations applying to its business; or OneMarket management. Management estimates are Westfield Shareholders who are individuals and the other based on views as at the date of this Demerger Booklet –– the attraction and retention of qualified employees individuals in respect of whom personal information and actual facts or outcomes may be materially different and key personnel; is collected as outlined above have certain rights to from those estimates. –– OneMarket’s ability to successfully expand in its access the personal information collected in relation to existing markets and into new markets; and them. Such individuals should contact Westfield’s Share Effect of rounding –– OneMarket’s use of its net cash. Registry on 1300 132 211 (within Australia) or +61 3 A number of figures, amounts, percentages, prices, estimates, calculations of value and fractions in this The above list may not contain all of the forward looking 9415 4070 (outside Australia) if they wish to exercise Demerger Booklet are subject to the effect of rounding. statements made in this Demerger Booklet. these rights. Accordingly, actual calculations may differ from amounts Westfield Shareholders who appoint a named person to While Westfield and OneMarket Limited believe there is set out in this Demerger Booklet. a reasonable basis for the forward looking statements act as their proxy, attorney or corporate representative Date contained in the Demerger Booklet, they do involve should ensure that they inform that person of the matters This Demerger Booklet is dated 12 April 2018. known and unknown risks, uncertainties, assumptions outlined above. and other important factors that could cause the actual Notices of Meeting results, performance or achievements of Westfield or The Notice of Demerger Scheme Meeting is set out in OneMarket to be materially different from future results, Annexure C. performance or achievements expressed or implied by The Notice of General Meeting is set out in Annexure D. those statements. Such forward looking statements are based on numerous assumptions regarding present Notice of Second Court Hearing and future business strategies and the environment At the Second Court Hearing the Scheme Court will in which Westfield or OneMarket will operate in the consider whether to approve the Demerger Scheme. future. Certain important factors that could cause Each Westfield Shareholder and, with the Scheme actual results, performance or achievements to differ Court’s permission, any other interested person has the materially from those in this Demerger Booklet include, right to appear at the Second Court Hearing. among other things, the risk factors described in this The Corporations Act and Supreme Court (Corporations) Demerger Booklet, and other unknown risks and Rules 1999 provide a procedure for Westfield uncertainties. Forward looking statements should, Shareholders to oppose the approval by the Scheme therefore, be construed in light of such risk factors. Court of the Demerger Scheme. If you wish to oppose OneMarket operates in a very competitive and rapidly the approval of the Demerger Scheme at the Second changing environment. New risks and uncertainties Court Hearing you may do so by filing with the Scheme emerge from time to time, and it is not possible for Court and serving on Westfield a notice of appearance Westfield and OneMarket Limited to predict all risks and in the prescribed form together with any affidavit on uncertainties that could have an impact on the forward which you wish to rely at the hearing. With leave of the looking statements contained in this Demerger Booklet. Scheme Court, you may also oppose the approval of You are cautioned not to place undue reliance on these the Demerger Scheme by appearing at the Second statements. Court Hearing and applying to raise any objections you Other than as required by law neither Westfield, may have at the hearing. Westfield should be notified OneMarket Limited nor any other person gives any in advance of an intention to object. The Second Court representation, assurance or guarantee that the events Hearing is currently scheduled to be held at the Supreme expressed or implied in any forward looking statements in Court of New South Wales, Law Courts Building, 184 this Demerger Booklet will actually occur. Phillip Street, Sydney NSW 2000 on 29 May 2018, though an earlier date may be sought. Any change to this date will be announced through ASX and notified on Westfield’s website (www.westfieldcorp.com). WHAT HAVE READ THIS FIRST YOU RECEIVED This document has been prepared to help you, as a Westfield Shareholder, to decide whether to vote “in favour of” or “against” the Demerger Scheme and related Capital Reduction. The Westfield Directors recommend that you for “in favour of” the Demerger Scheme and related Capital Reduction.
THE NOTICE OF DEMERGER SCHEME MEETING IS IN ANNEXURE C AND THE NOTICE OF GENERAL MEETING IS IN ANNEXURE D OF THIS DEMERGER BOOKLET
Demerger Booklet This document explains in detail CONTENTS the Demerger (see Annexure C for the Notice of Demerger Scheme Important notices IFC Meeting and Annexure D for the What is this Demerger Booklet for? 4 Notice of General Meeting). Important dates 5 Chairman’s Letter 6 Summary 8 1. Matters relevant to your vote on the Demerger 11 2. Frequently asked questions 16 Business reply envelope 3. Details of the Demerger 32 Place the proxy form in this 4. Information on OneMarket 42 envelope and post it to vote by 5. Financial Information on OneMarket 64 proxy at the Meetings. 6. Risk factors 72
Lodge Online:your vote: www.investorvote.com.au By Mail: 7. Tax implications of the Demerger 87 Computershare Investor Services Pty Limited GPO Box 1282 Melbourne Victoria 3001 Australia In Person: Share Registry ABN 12 166 995 197 Computershare Investor Services Pty Limited Level 4, 60 Carrington Street Sydney NSW 2000 Australia Westfield Corporation Limited
Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555
For Intermediary Online subscribers only WFD (custodians) www.intermediaryonline.com MR SAM SAMPLE FLAT 123 For all enquiries call: 123 SAMPLE STREET XX (within Australia) 1300 132 211 8. Additional information 89 THE SAMPLE HILL (outside Australia) +61 3 9415 4070 SAMPLE ESTATE
SAMPLEVILLE VIC 3030 *S00000112Q01*
Proxy Form - Demerger Scheme Meeting (Demerger of OneMarket) Lodge your proxy online or view the Notice of Demerger Scheme Meeting and Demerger Booklet •Go to www.investorvote.com.au or scan the QR Code with your mobile device. • Follow the instructions on the secure website to vote. 9. Glossary 106
999999 Your access information that you will need to vote: Control Number: SRN/HIN: I9999999999 Signing Instructions for Postal Forms Where the holding is in one name, the securityholder must PLEASE NOTE: For security reasons it is important that you keep your SRN/HINIndividual: confidential. sign. Joint Holding: Where the If you holding have is not in more already than lodged one name, the Power all of ofthe For your vote to be effective it must be received by 11.00amsecurityholders (SydneyAttorney: must time) sign. on Tuesday, 22 May 2018 Power of Attorney with the registry, please attach a certified photocopy of the How to Vote on the Item of Business Power of Attorney Where to this the form company when has you a return Sole Directorit. who is also the All your securities will be voted in accordance with your directions. Companies: 236865_022GWA Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) Appointment100% of of your Proxy holding: Direct your proxy how to vote by Voting does not have a Company Secretary, a Sole Director can also sign Annexure A – Independent Expert’s Report 112 marking one of the boxes opposite the item of business. If you do not alone. Otherwise this form must be signed by a Director jointly with mark a box your proxy may vote or abstain as they choose (to the either another Director or a Company Secretary. Please sign in the extent permitted by law). If you mark more than one box on an item appropriate place to indicate the office held. Delete titles as applicable. your vote will be invalid on that item. Attending the Meeting Voting a portion of your holding: Indicate a portion of your voting Bring this form to assist registration. If a representative of a corporate rights by inserting the percentage or number of securities you wish to securityholder or proxy is to attend the meeting you will need to provide vote in the For, Against or Abstain box or boxes. The sum of the votes the appropriate “Certificate of Appointment of Corporate cast must not exceed your voting entitlement or 100%. Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com Appointing a second proxy: You are entitled to appoint up to two under the help tab, "Printable Forms". proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of If you have any comments or questions for securities for each proxy, otherwise each proxy may exercise half of Comments & Questions: the company, please write them on a separate sheet of paper and return the votes. When appointing a second proxy write both names and the with this form. percentage of votes or number of securities for each in Step 1 overleaf. GO ONLINE TO VOTE, Annexure B – Independent Limited Assurance Report 142 Samples/000001/000001/i12 A proxy need not be a securityholder of Westfield or turn over to complete the form Corporation Limited. Lodgement of a Proxy The proxy form may be lodged with Computershare (details above). A reply paid envelope is included with the Notice of Meeting and this Proxy Form. Annexure C – Notice of Demerger Scheme Meeting 150 Proxy form for Demerger Scheme Annexure D – Notice of General Meeting 154 Meeting Annexure E – Demerger Scheme of Arrangement 158 Complete this form and return it to vote by proxy at the Demerger Annexure F – Demerger Deed Poll 175 Scheme Meeting. Instructions for completion of the form are printed Certain terms and abbreviations used in this document have defined on the reverse of the form. meanings which are explained in section 9.
Lodge Online:your vote: www.investorvote.com.au
By Mail: Computershare Investor Services Pty Limited GPO Box 1282 Melbourne Victoria 3001 Australia In Person: Share Registry ABN 12 166 995 197 Computershare Investor Services Pty Limited Level 4, 60 Carrington Street Sydney NSW 2000 Australia Westfield Corporation Limited
Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555
For Intermediary Online subscribers only WFD (custodians) www.intermediaryonline.com MR SAM SAMPLE FLAT 123 For all enquiries call: 123 SAMPLE STREET (within Australia) 1300 132 211 XX THE SAMPLE HILL (outside Australia) +61 3 9415 4070 SAMPLE ESTATE
SAMPLEVILLE VIC 3030 *S00000112Q01*
Proxy Form - General Meeting (Demerger of OneMarket) Lodge your proxy online or view the Notice of General Meeting •Go to www.investorvote.com.au or scan the QR Code with your mobile device. • Follow the instructions on the secure website to vote.
999999 Your access information that you will need to vote: Control Number: SRN/HIN: I9999999999 Signing Instructions for Postal Forms Where the holding is in one name, the securityholder must PLEASE NOTE: For security reasons it is important that you keep your SRN/HINIndividual: confidential. sign. Joint Holding: Where the If you holding have is not in more already than lodged one name, the Power all of ofthe For your vote to be effective it must be received by 11.00amsecurityholders (Sydney must time) sign. on Tuesday, 22 May 2018 Power of Attorney: WHAT YOU SHOULD DO Attorney with the registry, please attach a certified photocopy of the How to Vote on the Item of Business Power of Attorney Where to this the form company when has you a return Sole Directorit. who is also the All your securities will be voted in accordance with your directions. Companies: 236865_022GUA Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) Appointment100% of of your Proxy holding: Direct your proxy how to vote by Voting does not have a Company Secretary, a Sole Director can also sign marking one of the boxes opposite the item of business. If you do not alone. Otherwise this form must be signed by a Director jointly with mark a box your proxy may vote or abstain as they choose (to the either another Director or a Company Secretary. Please sign in the extent permitted by law). If you mark more than one box on an item appropriate place to indicate the office held. Delete titles as applicable. your vote will be invalid on that item. Attending the Meeting Voting a portion of your holding: Indicate a portion of your voting Bring this form to assist registration. If a representative of a corporate rights by inserting the percentage or number of securities you wish to securityholder or proxy is to attend the meeting you will need to provide vote in the For, Against or Abstain box or boxes. The sum of the votes the appropriate “Certificate of Appointment of Corporate cast must not exceed your voting entitlement or 100%. Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com Appointing a second proxy: You are entitled to appoint up to two under the help tab, "Printable Forms". proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of please write themIf you on have a separate any comments sheet of or paper questions and return for securities for each proxy, otherwise each proxy may exercise half of Comments & Questions: the company, the votes. When appointing a second proxy write both names and the with this form. percentage of votes or number of securities for each in Step 1 overleaf. GO ONLINE TO VOTE, Samples/000001/000001/i12 A proxy need not be a securityholder of Westfield or turn over to complete the form Corporation Limited. Lodgement of a Proxy The proxy form may be lodged with Computershare (details above). reply paid envelope is included with the Notice of Meeting and this WITH THIS DEMERGER A Proxy Form. Proxy form for General Meeting BOOKLET Complete this form and return it to vote by proxy at the General You should read this Demerger Booklet carefully. If you have any questions Meeting. Instructions for completion you can ring the Shareholder Information Line on 1300 232 211 (within Australia) of the form are printed on the or +61 3 9415 4070 (outside Australia) between Monday and Friday from reverse of the form. 9.00am to 5.00pm.
PAGE 2 // WESTFIELD CORPORATION PROPOSAL WHERE DO I FIND INFORMATION IN THIS DEMERGER BOOKLET?
WHERE IS THERE A Chairman’s letter (pages 6 to 7) SUMMARY OF THE Summary (pages 8 to 10) DEMERGER?
WHERE DO I FIND ANSWERS TO QUESTIONS Section 2: Frequently asked questions (pages 16 to 31) I MIGHT HAVE?
WHERE DO I FIND OUT ABOUT WHEN THINGS Important dates (page 5) WILL TAKE PLACE?
WHERE DO I FIND REASONS FOR AND Section 1: Matters relevant to your vote (pages 11 to 15) AGAINST APPROVING THE DEMERGER?
WHERE DO I FIND INFORMATION ABOUT THE Section 4: Information on OneMarket (pages 42 to 63) Section 5: Financial Information on OneMarket (pages 64 to 71) ONEMARKET SHARES I Section 6: Risk factors (pages 72 to 86) WOULD RECEIVE?
WHERE DO I FIND OUT ABOUT THE TAX EFFECTS Section 7: Tax implications of the Demerger (pages 87 to pages 88) OF THE DEMERGER?
WHAT ABOUT THE MERGER Refer to the separate Unibail-Rodamco Transaction OF WESTFIELD AND Securityholder Booklet UNIBAIL-RODAMCO?
WESTFIELD CORPORATION PROPOSAL // PAGE 3 WHAT IS THIS DEMERGER BOOKLET FOR?
This Demerger Booklet relates to the Demerger of OneMarket Limited by Westfield Corporation. The purpose of the Demerger Booklet is to provide Westfield Shareholders with information to consider before voting on the resolutions to be considered at the Demerger Scheme Meeting and the General Meeting scheduled for 11.00am (or as soon thereafter as the Unibail-Rodamco Transaction Meetings conclude) on 24 May 2018. It also provides information in relation to OneMarket as a standalone business and in relation to OneMarket Shares. The Demerger is conditional on, among other things, the approval by the Scheme Court of the Unibail-Rodamco Schemes which provide for the combination of Westfield and Unibail-Rodamco SE. The Unibail-Rodamco Schemes are not conditional on the approval of the Demerger. Full details of the Unibail-Rodamco Transaction and relevant information about Westfield can be found in the Unibail-Rodamco Transaction Securityholder Booklet, which has been sent to Westfield Shareholders at the same time as this Demerger Booklet. You should read this Demerger Booklet in conjunction with the Unibail-Rodamco Transaction Securityholder Booklet.
YOU SHOULD ALSO HAVE RECEIVED THE UNIBAIL-RODAMCO TRANSACTION SECURITYHOLDER BOOKLET The Unibail-Rodamco Transaction Meetings are scheduled for 10.00am on 24 May 2018. If you have not received the Unibail-Rodamco Transaction Securityholder Booklet please contact the Shareholder Information Line on 1300 132 211 (within Australia) or +61 3 9415 4070 (outside Australia) between 9.00am to 5.00pm (Sydney time) Monday to Friday.
PAGE 4 // WESTFIELD CORPORATION PROPOSAL IMPORTANT DATES
11.00am on 22 May 2018 Latest time and date for receipt of red Demerger Scheme Meeting Proxy Form and blue General Meeting Proxy Form 7.00pm on 22 May 2018 Time and date for determining eligibility to vote at the Demerger Scheme Meeting and General Meeting 11.00am (or as soon thereafter as Demerger Scheme Meeting and General Meeting to be held at Centennial Hall, Sydney the Unibail-Rodamco Transaction Town Hall, 483 George St, Sydney Meetings conclude) on 24 May 2018
If the Demerger is approved by Westfield Shareholders 29 May 2018 Second Court Hearing for approval of the Demerger Scheme 30 May 2018 Effective Date Scheme Court order is lodged with ASIC and Demerger Scheme takes effect Last day of trading in Westfield Shares with an entitlement to participate in the Demerger 5.00pm on 30 May 2018 Election time Latest time and date by which Demerger Sale Facility Election Forms and Election Withdrawal Forms must be received by the Westfield Registry (for Eligible Westfield Shareholders who individually hold 10,000 Westfield Shares or fewer as at the Demerger Record Date) 10.00am on 31 May 2018 ASX Listing of OneMarket Limited, OneMarket Shares expected to commence trading on ASX on a deferred settlement basis 7.00pm on 1 June 2018 Demerger Record Date Time and date for determining entitlement to receive OneMarket Shares 7 June 2018 Demerger Implementation Date Transfer of OneMarket Shares to Eligible Westfield Shareholders (or Sale Agent as applicable) 8 June 2018 Dispatch of holding statements for OneMarket Shares and last day of deferred settlement trading for OneMarket Shares 11 June 2018 OneMarket Shares expected to commence trading on a normal settlement basis on ASX 31 May 2018 to 17 July 2018 OneMarket Shares sold by the Sale Agent on behalf of Selling Shareholders 31 July 2018 Dispatch of payments to Selling Shareholders
All dates following the date of the Demerger Scheme Meeting are indicative only and, among other things, are subject to all necessary approvals from the Scheme Court and other Regulatory Authorities. Any changes to the above timetable (which may include a later Second Court Hearing) will be announced through ASX and notified on Westfield’s website www.westfieldcorp.com. All references to time in this Demerger Booklet are references to Sydney time.
WESTFIELD CORPORATION PROPOSAL // PAGE 5 CHAIRMAN’S LETTER
FRANK LOWY AC
Dear Westfield Shareholder, On behalf of the Westfield Board, I am delighted to present Westfield has long recognised the potential for technology you with this Demerger Booklet. to transform the way that people shop and the OneMarket On 12 December 2017 Westfield announced two business has its roots in Westfield’s early investment in separate but related transactions, being the combination digital innovation. OneMarket’s strategic focus has evolved of Westfield and Unibail-Rodamco and the demerger of over recent years from solely catering to Westfield shopping part of Westfield’s retail technology business, OneMarket. centres, to the position today where it is seeking to build a Initially, OneMarket Limited will own 90% of the OneMarket broad network of retailers, shopping venues, brands and business, with the combined Westfield / Unibail-Rodamco technology companies spanning well beyond Westfield’s group owning 10%. properties. OneMarket has signed 3 network participation agreements so far including with Unibail-Rodamco/ OneMarket’s strategy is to develop a retail technology Westfield and Nordstrom, Inc. and so is at the start of network that seeks to help bricks-and-mortar retailers building the network. In order to continue the development compete more effectively in the evolving retail environment. of OneMarket’s network, the Westfield Directors believe OneMarket plans to do this by using its proposed network that there is a strong rationale for the separation of to develop product solutions which bring together retailers, OneMarket from Westfield and that this separation is shopping venues, brands and technology companies best implemented via the Demerger. The Westfield Board (collectively referred to as “network participants”). The believes that OneMarket will be better positioned as an objective of the OneMarket network is to rapidly implement independent company given its technology focus, financial new technologies at scale, to facilitate collaboration in profile and ability to develop its products as a standalone the retail industry and to leverage a comprehensive set industry network. of consumer data to provide network participants with insights and intelligence regarding their consumers and OneMarket Limited will be ASX listed, chaired by Steven the products they browse and buy. By developing its Lowy and led by Don Kingsborough as its chief executive platform and growing its network, OneMarket is aiming officer. On implementation of the Demerger, OneMarket is to improve the business of bricks-and-mortar retailers expected to have approximately $160 million in cash for and shopping venues, attract consumers to its network working capital purposes, and no debt. Given the early and provide a better shopping experience for consumers. stage nature of OneMarket, it is some way from generating Unibail-Rodamco has signed on as a participant in the substantial revenue, breaking even and delivering a profit. OneMarket network. The cash being demerged with OneMarket provides OneMarket with initial funding to execute and prove It is early days for OneMarket which is currently focused its strategy. on developing its platform, building its network and rolling out its initial products. OneMarket is in the process of OneMarket will likely need to raise third party capital over releasing networked versions of Live Receipts (an interactive time. If OneMarket shareholders do not participate, or are digital receipt that allows retailers and/or shopping venues not eligible to participate in future capital raisings, their to engage shoppers after a transaction) and Intelligent ownership in OneMarket will be diluted. Parking Technology (software and related services that The OneMarket Demerger offers Westfield Shareholders enable shopping venues to upgrade their existing parking the potential to receive additional value if OneMarket offering to reduce the difficulties consumers face when successfully executes its strategy that would not otherwise entering and exiting controlled parking). Existing versions be reflected in the consideration that Unibail-Rodamco of the products described above are currently offered and is offering pursuant to the Unibail-Rodamco Transaction. are considered precursors to the enhanced versions. In Importantly, Westfield Shareholders are not being asked addition, OneMarket’s existing Shopper Exchange product to make any financial commitment to receive OneMarket generates revenue from advertisers to deploy and manage Shares pursuant to the Demerger. targeted digital advertising campaigns using retailers’ data. The product offering of OneMarket is planned to grow substantially over time.
PAGE 6 // WESTFIELD CORPORATION PROPOSAL Your board considers that the Demerger is in the best I encourage you to read this Demerger Booklet (including interests of Westfield Shareholders. The directors the report of the Independent Expert) carefully in full unanimously recommend that you vote in favour of the and, if required, to seek your own legal, financial or other Demerger Scheme and the related Capital Reduction, which professional advice. is a necessary step in the process of effecting the Demerger. Shareholders who have any questions relating to the scheme The key reasons for your directors’ recommendation of should contact the Westfield Shareholder Information the Demerger are set out in section 1.1 of this Demerger Line on 1300 132 211 (for callers within Australia) or Booklet. The reasons why you may choose to vote against +61 3 9415 4070 (for callers outside Australia) between the Demerger are set out in section 1.2. 9.00am and 5.00pm (Sydney time) Monday to Friday, or visit Each Westfield Director intends to vote in favour of the www.westfieldcorp.com/investors/transaction-information. Demerger Scheme and the related Capital Reduction in Yours sincerely relation to all Westfield Shares held or controlled by them. The Independent Expert, Grant Samuel & Associates Pty Limited, considers that the Demerger is in the best interests of Westfield Shareholders. The Independent Expert’s full report is set out in Annexure A. The Demerger Scheme Meeting and the General Meeting are scheduled to be held at Centennial Hall, Sydney Town Hall, 483 George St, Sydney at 11.00am (or as soon Sir Frank Lowy AC thereafter as the Unibail-Rodamco Transaction Meetings Chairman conclude) on 24 May 2018. Your vote is important. I strongly encourage you to vote either by attending the Demerger Scheme Meeting and the General Meeting in person or by completing and returning the accompanying red and blue proxy forms so that they are received at the address shown on the proxy form by 11.00am on 22 May 2018. If the resolutions required to implement the Demerger are not passed and the Unibail-Rodamco Transaction proceeds, the combined Westfield/Unibail-Rodamco group will retain ownership of OneMarket and Westfield Shareholders will be exposed to the economics of OneMarket purely through their shareholding in the Westfield/Unibail-Rodamco group.
WESTFIELD CORPORATION PROPOSAL // PAGE 7 SUMMARY
What is the Demerger? Why Demerge OneMarket? Westfield Corporation is seeking to demerge OneMarket Prior to the Unibail-Rodamco Transaction, Westfield Limited to Westfield Shareholders. had been considering a strategy to separate OneMarket OneMarket’s strategy is to develop a retail technology from Westfield. network that seeks to help bricks-and-mortar retailers The Unibail-Rodamco Transaction has provided an compete more effectively in the evolving retail environment. opportunity to accelerate the separation of OneMarket OneMarket plans to do this by using its proposed network from the Westfield business. OneMarket management has to develop product solutions which bring together retailers, contemplated that OneMarket would ultimately separate shopping venues, brands and technology companies. The from Westfield as the OneMarket business plan is based objective of the OneMarket network is to rapidly implement on relationships with a broad range of business participants, new technologies at scale, to facilitate collaboration in not just Westfield as one of the OneMarket shopping the retail industry and to leverage a comprehensive set of venue participants. consumer data to provide network participants with insights The Westfield Directors believe that the OneMarket and intelligence regarding their consumers and the products Demerger offers Westfield Shareholders the potential consumers browse and buy. These solutions are designed to receive additional value that would not otherwise be so that all network participants benefit as each new reflected in the consideration that Unibail-Rodamco is participant joins. OneMarket believes that by operating as offering pursuant to the Unibail-Rodamco Transaction. a network rather than acting as individual or siloed entities, network participants can better harness the power of their What is the Westfield Directors’ recommendation? collective knowledge and scale and achieve results no single The Westfield Directors believe that the Demerger Scheme participant could obtain alone. and the related Capital Reduction are in the best interests The Demerger is proposed to occur by way of a scheme of of Westfield Shareholders. arrangement, dividend and capital reduction which will result The Westfield Directors are also of the view that, taking into in 100% of the OneMarket Shares being distributed to, or for account all relevant matters, the Capital Reduction is fair and the benefit of, Westfield Shareholders. reasonable to Westfield Shareholders as a whole and will Unibail-Rodamco, through Westfield, will initially retain a 10% not materially prejudice the ability of Westfield Corporation interest in OneMarket’s business through its holding of 10% to pay its creditors. of the shares in OM Delaware, a United States Subsidiary of The Westfield Directors unanimously recommend that OneMarket Limited. The remaining 90% of the shares in OM Westfield Shareholders vote in favour of the Demerger Delaware will initially be held by OneMarket Limited. These Scheme at the Demerger Scheme Meeting and the Capital shareholdings will be diluted pro rata by the implementation Reduction at the General Meeting. of the 2018 Equity Incentive Plan as described in section In reaching their recommendation, your Westfield 4.12 of this Demerger Booklet. Directors have assessed the Demerger Scheme and the Westfield Shareholders are not required to pay any additional related Capital Reduction having regard to the reasons cash to receive OneMarket Shares. Eligible Westfield to vote for, or against, the Demerger, as set out in this Shareholders (other than Selling Shareholders) will be Demerger Booklet. entitled to one OneMarket Share for every 20 Westfield Each of the Westfield Directors intends to vote the Westfield Shares they hold as at the Demerger Record Date. Shares that they own or control, and will direct any Westfield As a result of the Demerger OneMarket Limited, which is proxies placed at their discretion in favour of the Demerger currently a wholly owned subsidiary of Westfield, will become Scheme and the related Capital Reduction. a standalone entity listed on ASX. What will happen if the Demerger is not The Demerger is conditional on, among other things, the implemented? approval by the Scheme Court of the Unibail-Rodamco Schemes. The Unibail-Rodamco Schemes are not If the Demerger is not implemented, Westfield Shareholders conditional on the approval of the Demerger. Full details of will not receive the Demerger Consideration and OneMarket the Unibail-Rodamco Schemes can be found in the Unibail- Limited will remain a wholly owned Subsidiary of Westfield Rodamco Transaction Securityholder Booklet, which has Corporation. In this event, the Unibail-Rodamco Schemes been sent to Westfield Stapled Securityholders at the same may still be implemented and, if that is the case, all of your time as this Demerger Booklet. Westfield Stapled Securities would be transferred to Unibail-
PAGE 8 // WESTFIELD CORPORATION PROPOSAL Rodamco and you would receive the Unibail-Rodamco The Demerger Dividend is a component of the Distribution. Scheme Consideration and you would not receive any The aggregate amount of the Demerger Dividend will be the shares in OneMarket Limited. lower of A$150,000,000 and the aggregate amount of the Distribution. What will happen if the Unibail-Rodamco Schemes are not implemented? The Demerger Dividend does not require the approval of Westfield Shareholders. If the Unibail-Rodamco Schemes are not implemented, the Demerger will not be implemented, Westfield Shareholders If the aggregate amount of the Distribution exceeds will not receive the Demerger Consideration and OneMarket A$150,000,000, the amount by which the Distribution Limited will remain a wholly owned Subsidiary of Westfield exceeds A$150,000,000 will be returned to Westfield Corporation. In this event, the timing of any separation of Shareholders through the Capital Reduction. OneMarket from Westfield would be revisited. The Capital Reduction (if any) is a return of capital to Westfield Shareholders on their Westfield Shares. The What is the Demerger Scheme? Capital Reduction (if any) is an equal capital reduction The Demerger Scheme is a scheme of arrangement pursuant to section 256B(1) of the Corporations Act. between Westfield Corporation and Westfield Shareholders Westfield Shareholders will be asked to approve the Capital under part 5.1 of the Corporations Act. Reduction at the General Meeting. Under the Demerger Scheme, Eligible Westfield Shareholders (other than Selling Shareholders) will receive What am I being asked to vote on? one OneMarket Share for every 20 Westfield Shares they You are being asked to vote on whether to approve: hold as at the Demerger Record Date. The Distribution on —— the Demerger Scheme, by voting in favour of, or Westfield Shares by way of the Capital Reduction and the against the Demerger Scheme Resolution at the Demerger Dividend will be automatically applied to pay for Demerger Scheme Meeting; and the OneMarket Shares. —— the Capital Reduction, by voting in favour of, or The purpose of the Demerger Scheme is to separate against the Capital Reduction Resolution at the OneMarket Limited from Westfield. General Meeting. Westfield Shareholders will be asked to approve the For the Demerger to be implemented: Demerger Scheme at the Demerger Scheme Meeting. —— the Demerger Scheme Resolution must be passed What is the Distribution? by Westfield Shareholders by the Requisite Majority, The Demerger will be effected by the Distribution, and being: implemented by the Demerger Scheme. The Distribution, —— a majority in number (more than 50%) of consisting of the Demerger Dividend and the Capital Westfield Shareholders who are present and Reduction (if any), is a necessary step in the process of voting either in person or by proxy, attorney or, effecting the Demerger. in the case of corporate Westfield Shareholders, The Distribution Entitlement, consisting of the Demerger by corporate representative; and Dividend Entitlement and the Capital Reduction Entitlement —— at least 75% of the total number of votes cast on (if any), will not be paid to Demerger Participants in cash the Demerger Scheme Resolution to approve the but will instead be applied on behalf of the Demerger Demerger Scheme; and Participants as consideration for the transfer of OneMarket —— the Capital Reduction Resolution must be passed by Shares under the Demerger Scheme. the Westfield Shareholders by more than 50% of the The aggregate amount of the Distribution will be an votes cast on the Capital Reduction Resolution. amount equal to the market value of all OneMarket Shares The Demerger is also subject to the satisfaction or waiver calculated by reference to the VWAP of OneMarket Shares of the Conditions Precedent (which are summarised in for the first ten Business Days starting from the date of the section 3.4 and set out in full in the Demerger Scheme), and commencement of trading of OneMarket Shares on ASX approval by the Scheme Court. (including on a deferred settlement basis). The terms of the Demerger Scheme are set out in full in Annexure E.
WESTFIELD CORPORATION PROPOSAL // PAGE 9 SUMMARY CONTINUED
What should I do? How to vote by proxy You should read this Demerger Booklet carefully in its Your red personalised proxy form for the Demerger Scheme entirety and then vote by attending the Meetings or by Meeting and your blue personalised proxy form for the appointing a proxy to vote on your behalf. Full details of General Meeting accompany this Demerger Booklet. who is eligible to vote and how to vote are set out below. Information setting out how you may vote by proxy is Answers to various frequently asked questions are set out contained in the notices of meeting in Annexure C and on pages 16 to 31. If you have any additional questions in Annexure D. If your proxy is signed by an attorney, please relation to this Demerger Booklet or the Demerger please also enclose the original authority under which the proxy is consult your legal, financial or other professional adviser signed (or a certified copy of the authority). or call the Shareholder Information Line on 1300 132 211 Proxy forms may be lodged as follows: within Australia and +61 3 9415 4070 outside Australia Online at www.investorvote.com.au between Monday and Friday from 9.00am to 5.00pm Mail the completed proxy forms to Computershare Investor (Sydney time). Services Pty Limited, GPO Box 1282, Melbourne, Victoria How do I vote? 3001, Australia using the reply paid envelope provided. If you are registered on the Westfield Register at 7.00pm on Mobile, by scanning the QR code on the proxy form and 22 May 2018 as a Westfield Shareholder, you will be entitled following the prompts. to vote on the resolution to approve the Demerger Scheme Custodians, visit www.intermediaryonline.com to at the Demerger Scheme Meeting and the resolution to submit your voting intentions (for Intermediary Online approve the Capital Reduction at the General Meeting. subscribers only). Registrable transmission applications or transfers registered Deliver the completed proxy forms to after this time will be disregarded in determining entitlements the Westfield Share Registry located at Level 4, to vote at the Scheme Meeting and the General Meeting. 60 Carrington Street, Sydney NSW 2000 If Westfield Shares are jointly held, only one of the joint Fax the completed proxy forms to the Westfield Shareholders may vote. If more than one joint Westfield Share Registry on 1800 783 447 (within Australia) or Shareholder votes, only the vote of the Westfield +61 3 9473 2555 (outside Australia) Shareholder whose name appears first on the Westfield Register will be counted. Proxy forms, together with any power of attorney or authority under which the proxy form is signed, must be received How to vote in person no later than 11.00am on 22 May 2018 (48 hours prior to To vote in person at the Meetings, Westfield Shareholders commencement of the Meetings). Proxy forms received after must attend the Meetings to be held at Centennial Hall, this time will be invalid. Sydney Town Hall, 483 George St, Sydney on 24 May 2018. A proxy will be admitted to the Meetings and given a voting The Meetings comprise the Demerger Scheme Meeting card upon providing written evidence of their name and (which will commence at 11.00am (or as soon thereafter address at the point of entry to the Meetings. The sending as the Unibail-Rodamco Transaction Meetings conclude)) of a proxy form will not preclude a Westfield Shareholder and the General Meeting (which will commence at 11.00am from attending in person and voting at the Meetings. (or as soon thereafter as the Unibail-Rodamco Transaction However, under the Corporations Act the presence of a Meetings conclude)). shareholder at a meeting suspends his or her proxy’s rights A Westfield Shareholder who wishes to attend and vote at to speak and vote. the Meetings in person will be admitted to the Meetings and given a voting card upon disclosure of their name and address at the point of entry. Persons who are attending as an attorney should bring the original or a certified copy of the power of attorney to the Meetings, unless it has already been noted by Westfield. The power of attorney must also be provided to the Westfield Registry in the same manner, and at the same time, as outlined for the proxy forms below. Persons who are attending as a corporate representative for a corporation must bring evidence of their appointment. The appointment must comply with section 250D of the Corporations Act. An authorised corporate representative will be admitted to the Meetings and given a voting card upon providing written evidence of their appointment (including any authority under which it is signed), their name and address and the identity of their appointer, at the point of entry to the Meetings.
PAGE 10 // WESTFIELD CORPORATION PROPOSAL SECTION 1 MATTERS RELEVANT TO YOUR VOTE ON THE DEMERGER
This section contains reasons you may decide to vote for or against the Demerger as well as other considerations Your Westfield Directors unanimously recommend that you vote for the Demerger Scheme and the related Capital Reduction The Westfield Directors believe that the Demerger Scheme and the related Capital Reduction are in the best interests of Westfield Shareholders. The Westfield Directors are also of the view that, taking into account all relevant matters, the Capital Reduction is fair and reasonable to Westfield Shareholders as a whole and will not materially prejudice the ability of Westfield Corporation to pay its creditors. The Westfield Directors unanimously recommend that Westfield Shareholders vote in favour of the Demerger Scheme at the Demerger Scheme Meeting and the related Capital Reduction at the General Meeting. In reaching their recommendation, your Westfield Directors have assessed the Demerger having regard to the reasons to vote for, or against, the Demerger, as set out in this Demerger Booklet. Each of your Westfield Directors intends to vote the Westfield Shares that they own or control, and will direct any Westfield proxies placed at their discretion, in favour of the Demerger Scheme and the related Capital Reduction. In considering whether to vote for the Demerger Scheme and the related Capital Reduction, your Westfield Directors encourage you to: —— carefully read the whole of this Demerger Booklet (including the Independent Expert’s Report); —— consider the choices available to you as outlined in section 3; —— have regard to your individual risk profile, portfolio strategy, tax position and financial circumstances; and —— consult your legal, financial or other professional adviser.
WESTFIELD CORPORATION PROPOSAL // PAGE 11 SECTION 1 MATTERS RELEVANT TO YOUR VOTE ON THE DEMERGER
Reasons to vote for the Demerger ✔ Westfield Shareholders will have greater economic exposure to the potential value upside of OneMarket if it is demerged ✔ Westfield Shareholders are not being asked to make any financial commitment to receive OneMarket Shares pursuant to the Demerger ✔ The establishment of OneMarket as an independent entity will assist OneMarket’s business strategy ✔ A standalone OneMarket has an enhanced ability to pursue its own growth agenda and strategic priorities ✔ OneMarket will be able to adopt a capital structure appropriate for its scale, operations and strategic objective ✔ The Independent Expert has concluded that the Demerger is in the best interests of Westfield Shareholders ✔ No brokerage or stamp duty will be payable under the Demerger Scheme and the related Capital Reduction
Reasons to vote for the Demerger are discussed in more detail in section 1.1 of this Demerger Booklet.
Reasons not to vote for the Demerger ✘ OneMarket is an early stage start-up and there is significant risk associated with its activities ✘ OneMarket has no track record operating on a standalone basis, which may reduce its ability to access funding and capital markets or impact the trading price of OneMarket Shares ✘ There will be additional corporate and operating costs as a consequence of the Demerger ✘ OneMarket will no longer have financial support from Westfield to fund its activities and will need additional funding in the medium term ✘ There will be one-off transaction costs associated with the Demerger ✘ The Westfield Directors believe that there is likely to be a high degree of turnover in the register following the Demerger ✘ As there has been no public trading market for OneMarket Shares, an active trading market for OneMarket Shares may not develop, or if it develops may not be sustained
Reasons why you may not want to vote for the Demerger are discussed in more detail in section 1.2 of this Demerger Booklet.
PAGE 12 // WESTFIELD CORPORATION PROPOSAL 1.1 Reasons to vote for the Demerger (c) The establishment of OneMarket as an independent entity will assist OneMarket’s business strategy (a) Westfield Shareholders will have greater economic exposure to the potential value upside of OneMarket OneMarket and Westfield’s management teams formed if it is demerged the view that in order to succeed, OneMarket needed to become a trusted independent entity for retailers, shopping Under the terms of the agreement reached with Unibail- venues and brands generally, rather than being too closely Rodamco, OneMarket will be demerged (if approved tied to Westfield. As such, it was anticipated before by Westfield Shareholders) into an ASX-listed vehicle, contemplation of the combination with Unibail-Rodamco that OneMarket Limited, which initially will hold 90% of the OneMarket would separate from Westfield in due course. equity in the OneMarket business through its United States The pending Unibail-Rodamco Transaction has provided an Subsidiary, OM Delaware. Unibail-Rodamco, through opportunity for this to occur now. Westfield, will initially hold the other 10% of the equity in OM Delaware. These shareholdings will be diluted pro rata OneMarket’s prime focus is on building a retail technology by the implementation of the 2018 Equity Incentive Plan network. A core premise of a network model, generally as described in section 4.12 of this Demerger Booklet. speaking, is that it becomes incrementally more valuable OM Delaware will own the business and operations of with each new participant that joins the network. OneMarket. OM Delaware is expected to have approximately OneMarket’s business plan envisages creating relationships $160 million of net cash as at the time of the Demerger for with a broad range of participants, not just with Westfield as its activities. one shopping venue participant. OneMarket’s management team believes that the establishment of OneMarket as an If the Demerger does not gain the requisite approval, and independent entity will assist to increase the traction that it should the Unibail-Rodamco Schemes be implemented, has in attracting network participants (particularly amongst there will be no change to the consideration to be paid shopping venues, who may otherwise compete with by Unibail-Rodamco to Westfield Securityholders to Westfield). This in turn will assist to enhance the scale of the reflect the value of OneMarket. In that event, the entirety network. of OneMarket’s assets and operations will remain within the combined Unibail-Rodamco/Westfield group in which In addition, OneMarket’s management team considers that Westfield Shareholders will have an economic interest of the enhanced profile that OneMarket will receive as a result approximately 28%. of being a publicly traded entity will also assist in attracting network participants. Westfield Shareholders will therefore have greater economic exposure to the potential value upside if (d) A standalone OneMarket has an enhanced ability to OneMarket is demerged. pursue its own business plan and strategic priorities (b) Westfield Shareholders are not being asked to make OneMarket and Westfield are very different businesses any financial commitment to receive OneMarket and face different industry dynamics, financial profiles and Shares pursuant to the Demerger strategic priorities. Westfield Shareholders will not be required to make any Whilst OneMarket has had a separate management team financial contribution to receive the OneMarket Shares for some time, it has ultimately been a small part of a much pursuant to the Demerger and so downside for Westfield larger organisation. Following the Demerger, OneMarket’s Shareholders is limited. management team, as well as its board of directors, will be able to focus on their own business and strategic objectives. OneMarket will likely need to raise third party capital over time. Westfield Shareholders may have their interests in In addition, as an independent technology company, OneMarket diluted if they do not participate, or are not OneMarket’s management team believes that it may find given the opportunity to participate, in capital raisings it easier to hire and retain key talent as working for an but will be under no obligation to provide additional capital. independent technology firm may be a more attractive It is currently anticipated that additional capital for the proposition to potential staff than working within a large OneMarket business is more likely to be raised through corporate entity with a different focus. equity raising at the OM Delaware level rather than at the OneMarket Limited level having regard to the type of investors who are likely to be interested in investing in OneMarket. If OneMarket Limited does not participate in any such equity raising at the OM Delaware level or is not offered the opportunity to do so, Westfield Shareholders will have their interest in the OneMarket business diluted. Refer to section 4.9 for further detail of the future funding arrangements for the OneMarket business.
WESTFIELD CORPORATION PROPOSAL // PAGE 13 SECTION 1 MATTERS RELEVANT TO YOUR VOTE ON THE DEMERGER
(e) OneMarket will be able to adopt a capital structure 1.2 Possible reasons not to vote for the Demerger appropriate for its scale, operations and strategic objectives (a) OneMarket is an early stage start-up and there is significant risk associated with its activities Following the Demerger, OneMarket will have a greater ability to pursue a capital structure and financial policies Following the Demerger, OneMarket Limited will be an appropriate for its specific operational and strategic independently listed company of a much smaller scale objectives and appropriate for an early stage technology to Westfield. This may result in OneMarket Limited facing start-up. additional costs and risks compared to its previous position as a subsidiary of Westfield, a much larger organisation, For example, it is possible that OneMarket may wish to including less favourable terms in any future financing facilities introduce strategic equity partners at some stage in order to and different terms on which it procures goods and services. assist with the growth of the network. OneMarket’s corporate structure (at both the OneMarket Limited and the OM Delaware In addition, OneMarket is pursuing a fundamentally levels) has been established so that this can be accommodated. different strategy to Westfield. OneMarket is an early As noted in section 1.1(b), it is currently anticipated that it is stage technology start-up company and faces significant more likely that additional capital for the OneMarket business challenges in becoming a viable and profitable company. will be raised through equity raising at the OM Delaware level. If There is no certainty that OneMarket will be successful and OneMarket Limited does not, or is not given the opportunity to, therefore there can be no certainty that an investment in participate in any such equity raising, OneMarket Shareholders OneMarket Shares will ultimately have any value. will have their interest in the OneMarket business diluted. (b) OneMarket has no track record of operating on a Refer to section 4.9 for further detail of the future funding standalone basis, which may reduce its ability to arrangements for the OneMarket business. access funding and capital markets or impact the (f) The Independent Expert has concluded that the trading price of OneMarket Shares Demerger is in the best interests of Westfield OneMarket has no track record of operating on a Shareholders standalone basis and the OneMarket’s management team The Westfield Directors appointed Grant Samuel & has limited experience in operating an ASX listed entity. Associates Pty Limited to prepare an Independent Expert’s Details of OneMarket’s management team are set out in Report as to whether the Demerger is in the best interests section 4.10. OneMarket’s management team may not of Westfield Shareholders. successfully or efficiently manage OneMarket Limited’s Grant Samuel & Associates Pty Limited, has concluded transition to being a listed company that will be subject that the Demerger is in the best interests of Westfield to significant regulatory oversight and the reporting Shareholders. obligations contained in the Corporations Act and the ASX Listing Rules. In addition, OneMarket Limited expects that Grant Samuel & Associates Pty Limited notes that if the its management and other personnel will need to divert Unibail-Rodamco Transaction is approved, but Westfield attention from operational and other business matters to Shareholders vote against the Demerger, there will be no devote some time to these requirements. change to the consideration to be paid by Unibail-Rodamco to Westfield Securityholders (i.e. there is no increase The OneMarket management team is based in the United to reflect the value of, or the cash within, OneMarket). States and may need to outsource to obtain certain Accordingly, if the Unibail-Rodamco Transaction is approved expertise required to operate OneMarket Limited as an but the Demerger is not, Westfield Securityholders will, in ASX listed entity. OneMarket Limited will be required to aggregate, effectively give up a potential 90% interest in establish financial reporting, company secretarial, and the OneMarket business for nil consideration (although, as corporate communications functions in Australia to satisfy they will have a 28% interest in New Unibail-Rodamco, their Corporations Act and ASX requirements. It is intended that effective loss is 64.8% of the value of OneMarket). Simon Tuxen, the current General Counsel and Company Secretary of Westfield, will be employed by OneMarket A copy of the Independent Expert’s Report is included in Limited as Company Secretary. OneMarket Limited currently Annexure A. does not have plans to add other staff in Australia and will Your Directors encourage you to read the Independent therefore rely on outsourcing to meet these other (non- Expert’s Report in its entirety. company secretarial) requirements. (g) No brokerage or stamp duty will be payable under OneMarket has limited experience in accessing funding and the Demerger and the related Capital Reduction capital markets and may need to access expertise in order to do so. You will not incur any brokerage or stamp duty under the terms of the Demerger. Those factors may negatively impact the market price of OneMarket Limited.
PAGE 14 // WESTFIELD CORPORATION PROPOSAL (c) There will be additional corporate and operating costs (e) There will be one-off transaction costs associated as a consequence of the Demerger with the transaction Following the Demerger, OneMarket Limited will be an Total transaction costs payable by OneMarket Limited independent entity, separately listed on the ASX and will in connection with the Demerger are expected to be incur additional costs compared to its position as a wholly approximately $2.5 million. owned subsidiary of Westfield Corporation. These include Further information regarding transaction costs can be found costs associated with directors’ remuneration, additional in section 8.12. legal fees, audit fees, annual listing fees, annual general meeting and annual report costs, additional directors and (f) The Westfield Directors believe that there is likely to officer’s insurance premiums, operating the company be a high degree of turnover in the register following secretarial function, registry fees and investor relations the Demerger services fees. OneMarket Limited will be owned, immediately following OneMarket Limited estimates it will incur $2.3 million in the Demerger, by existing Westfield Shareholders, many incremental annual expenses as a public company. of whom, in the Westfield Directors’ opinion own Westfield Shares because of Westfield’s status as a leading REIT, its (d) OneMarket will no longer have financial support from scale or its position in various indices. Given the nature of Westfield to fund its activities OneMarket’s business, the Westfield Directors believe that OneMarket is incurring substantial costs in establishing there is likely to be substantial turnover in the shareholder the OneMarket network. To date, those costs have been register following the Demerger, which may impact the fully funded by Westfield, which has substantial financial register composition and share price for a period of time. resources available to it. From the Demerger Implementation Date, OneMarket will cease to have access to the financial (g) As there has been no public trading market for resources of Westfield. OneMarket Shares, an active trading market for OneMarket Shares may not develop, or if it develops As at 28 February 2018, the OneMarket Group had cash may not be sustained and cash equivalents of approximately $185.7 million. No assurance can be given that an active trading market OneMarket’s current estimate is that on average, it will for OneMarket Shares will develop or, if it develops, can be spend approximately $6.9 million of cash per month after sustained following the Demerger Implementation Date. the Demerger. Having considered its current business plan and related cash needs, OneMarket believes that its cash If an active trading market is not developed or maintained, and cash equivalents after taking into account the cash flow the liquidity and trading price of the OneMarket Shares could outcome from operations, initial set-up costs for corporate be materially adversely affected. functions (and including an allowance for potential closure 1.3 Other relevant considerations costs were that to occur), will be sufficient to meet its anticipated cash needs until late 2019 although OneMarket (a) The Demerger may be implemented even if you vote may decide to raise capital earlier than this. Following that against it time OneMarket will likely need to access other sources You should be aware that even if you do not vote, or of funding. vote against the Demerger, the Demerger may still be Westfield Shareholders’ economic interest in OneMarket implemented if it is approved by the Requisite Majority Limited will be diluted if they do not, or cannot, participate of Westfield Shareholders and the Scheme Court. If this in future capital raisings. If OneMarket Limited does not, occurs, you will be transferred OneMarket Shares as your or is not given the opportunity to, participate in any equity Demerger Consideration even though you did not vote on, raisings at the OM Delaware level, OneMarket Shareholders or voted against, the Demerger Scheme and related Capital will have their interest in the OneMarket business diluted. Reduction. Refer to section 4.9 for further detail of the future funding (b) Conditions Precedent arrangements for the OneMarket business. The Demerger is subject to a number of Conditions Precedent. These Conditions Precedent are summarised in section 3.4. If these Conditions Precedent are not satisfied or, if applicable, waived, the Demerger will not proceed, even if it is approved by Westfield Shareholders. As at the date of this Demerger Booklet, the Westfield Board is not aware of any matter or circumstance that would result in the non- fulfilment of any Conditions Precedent to the Demerger.
WESTFIELD CORPORATION PROPOSAL // PAGE 15 SECTION 2 FREQUENTLY ASKED QUESTIONS
This section contains answers to some frequently asked questions This Demerger Booklet contains detailed information regarding the Demerger. The following section provides summary answers to some questions you may have and will assist you to locate further detailed information in this Demerger Booklet.
Item Question Answer Where to find more (FAQ) information 1. Overview of the transaction 1.1 Why have I received this You have received this Demerger Booklet because you are a Demerger Booklet? Westfield Shareholder. The purpose of the Demerger Booklet is to provide Westfield Shareholders with information to consider before voting on the resolutions to be considered at the Demerger Scheme Meeting and the General Meeting scheduled for 11.00am (or as soon thereafter as the Unibail-Rodamco Transaction Meetings conclude) on 24 May 2018. It also provides information in relation to OneMarket as a standalone business and in relation to OneMarket Shares. 1.2 What is the Unibail- The Unibail-Rodamco Transaction is a proposed combination Section 3.1 Rodamco Transaction? of Unibail-Rodamco SE and Westfield. If the Unibail-Rodamco Unibail-Rodamco Schemes are implemented: Transaction –– New Unibail-Rodamco and its subsidiaries will acquire all Securityholder Booklet Westfield Stapled Securities and Westfield will become a wholly owned subsidiary of New Unibail-Rodamco; and –– Unibail-Rodamco will issue and pay to Westfield Stapled Securityholders the Unibail-Rodamco Scheme Consideration of 0.01844 New Unibail-Rodamco Stapled Shares (New Unibail-Rodamco CDIs by default based on an exchange ratio of 20 New Unibail-Rodamco CDIs for every one New Unibail-Rodamco Stapled Share), and $2.67 cash for each Westfield Stapled Security. The Unibail-Rodamco Schemes are conditional on, among other things, the approval by the Scheme Court of the Unibail- Rodamco Schemes. Full details of the Unibail-Rodamco Schemes can be found in the Unibail-Rodamco Transaction Securityholder Booklet, which has been sent to Westfield Stapled Securityholders at the same time as this Demerger Booklet.
PAGE 16 // WESTFIELD CORPORATION PROPOSAL Item Question Answer Where to find more (FAQ) information 1.3 What is the Demerger? Westfield proposes to demerge the OneMarket business. Section 3 The Demerger is proposed to occur by way of a scheme of arrangement, demerger dividend and capital reduction which will result in 100% of the OneMarket Shares being distributed to, or for the benefit of, Westfield Shareholders. Eligible Westfield Shareholders (other than Selling Shareholders) will be entitled to one OneMarket Share for every 20 Westfield Shares they hold as at the Demerger Record Date. As a result of the Demerger OneMarket Limited, which is currently a wholly owned subsidiary of Westfield Corporation, will become a standalone entity listed on ASX. The Demerger is conditional on, among other things, the approval of the Scheme Court of the Unibail-Rodamco Schemes. 1.4 Who will own the Unibail-Rodamco, through Westfield will initially own a 10% Sections 4.8 and 8.7 OneMarket business? interest in OneMarket’s business through its holding of 10% of the shares in OM Delaware, a United States Subsidiary of OneMarket Limited. The remaining initial 90% of the shares in OM Delaware will be held by OneMarket Limited. Each of these shareholdings will be diluted pro rata by the implementation of the 2018 Equity Incentive Plan as described in section 4.12 of this Demerger Booklet. 1.5 What is the Demerger The Demerger Scheme is a scheme of arrangement between Section 3.3(a) Scheme? Westfield and Demerger Participants under part 5.1 of the Annexure E Corporations Act. A “scheme of arrangement” is a statutory procedure that can be used, among other things, to enable a demerger of shares in a subsidiary of a company to its shareholders. Westfield Shareholders will be asked to approve the Demerger Scheme at the Demerger Scheme Meeting. 1.6 What is the Distribution? The Demerger will be effected by the Distribution, and Section 3.1(b) implemented by the Demerger Scheme. The Distribution, consisting of the Demerger Dividend and the Capital Reduction (if any), is a necessary step in the process of effecting the Demerger. The aggregate amount of the Distribution will be an amount equal to the market value of all OneMarket Shares calculated by reference to the VWAP of OneMarket Shares for the first ten Business Days starting from the date of the commencement of trading of OneMarket Shares on ASX (including on a deferred settlement basis). 1.7 What is the Demerger The Demerger Dividend is a component of the Distribution. Section 3.1(b) Dividend? The aggregate amount of the Demerger Dividend will be the lower of A$150,000,000 and the aggregate amount of the Distribution. You will not receive any cash under the Demerger Dividend.
WESTFIELD CORPORATION PROPOSAL // PAGE 17 SECTION 2 FREQUENTLY ASKED QUESTIONS
Item Question Answer Where to find more (FAQ) information 1. Overview of the transaction (continued) 1.8 What is the Capital If the aggregate amount of the Distribution exceeds Section 3.1(b) Reduction? A$150,000,000, the amount, if any, by which the Distribution Annexure D exceeds A$150,000,000 will be returned to Westfield Shareholders through the Capital Reduction. The Capital Reduction (if any) is a return of capital to Demerger Participants on their Westfield Shares equal to the Capital Reduction Entitlement. The Capital Reduction is an equal capital reduction pursuant to section 256B(1) of the Corporations Act. You will not receive any cash under the Capital Reduction. 1.9 Why has the Demerger Prior to the Unibail-Rodamco Transaction, Westfield had been Chairman’s Letter been proposed by the considering a strategy to separate, over time, OneMarket Westfield Board? from Westfield. OneMarket management has contemplated that OneMarket would ultimately separate from Westfield as the OneMarket business plan is based on relationships with a broad range of business participants, not just Westfield as one of the OneMarket shopping venue participants. The Unibail-Rodamco Transaction has provided an opportunity to accelerate the separation of OneMarket from the Westfield business. The Westfield Directors believe that the OneMarket Demerger offers Westfield Shareholders the potential to receive additional value if the OneMarket business strategy proves successful that would not otherwise be reflected in the consideration that Unibail-Rodamco is offering pursuant to the Unibail-Rodamco Transaction. 1.10 Do I need to pay anything No. Westfield Shareholders are not being asked to make any to receive OneMarket financial commitment in agreeing to receive OneMarket Shares Shares under the pursuant to the Demerger. Demerger? 1.11 Why does the Demerger Westfield is a stapled group comprising Westfield Corporation, only involve Westfield Westfield America Trust and WFD Trust. The OneMarket Corporation? business currently sits solely in Westfield Corporation. As such the involvement of Westfield America Trust and WFD Trust is not required to implement the Demerger. 2. Overview of OneMarket 2.1 What is OneMarket? OneMarket is developing a retail technology network that Section 4.1 seeks to help bricks-and-mortar retailers compete more effectively in the evolving retail environment. OneMarket plans to do this by using its proposed network to develop product solutions which bring together retailers, shopping venues, brands and technology companies. The objective of the OneMarket network is to rapidly implement new technologies at scale, to facilitate collaboration in the retail industry and to leverage a comprehensive set of consumer data to provide network participants with insights and intelligence regarding their consumers and the products consumers browse and buy. These solutions are designed so that all network participants benefit as each new participant joins. OneMarket believes that by operating as a network rather than acting as individual or siloed entities, network participants can better harness the power of their collective knowledge and scale and achieve results no single participant could obtain alone.
PAGE 18 // WESTFIELD CORPORATION PROPOSAL Item Question Answer Where to find more (FAQ) information 2.2 What is OneMarket’s OneMarket’s strategy is to create a global retailer, brand, Section 4.4 business strategy? shopping venue and technology company network that shares technology, strategic relationships and data-driven consumer insights to improve the businesses of its network participants. There are three key complementary investment components that are driving OneMarket’s strategy: –– Networked technology: A common retail network can help individual retailers to leverage each other’s information technology investments and learnings, and thus reduce costs. Amazon alone spends more on innovation than every bricks-and-mortar retailer individually and many such retailers combined. Given retailers’ limited information technology budgets and pressing business priorities, OneMarket believes it is nearly impossible for each of them to individually invest in innovation at the same level. At the same time, retailers cannot ignore the pressure to innovate to keep up with changing consumer needs, mindsets and expectations. For bricks-and-mortar retailers, being a part of the network means that they do not need to each invest in many of the same technologies individually but instead can leverage the network to enhance their business where the relevant capability is available as part of the network and avoid redundant spend. OneMarket believes that this approach not only reduces each individual retailer’s investment needs, but also minimises investment risks associated with innovation uncertainty. –– Strategic relationships: OneMarket’s aggregated network seeks to develop technology partnerships of greater scale and scope than a single retailer or shopping venue operator could on its own. OneMarket intends to establish strategic relationships with technology companies to further leverage technology investments and build better products for OneMarket’s clients (retailers, brands and shopping venues), shoppers, and other network participants. OneMarket proposes to act as a conduit between the various network participants to enable collaboration. –– Networked data: Single retailers can only gather information on a limited number of consumer interactions, while networked data enables a broader view of shoppers’ needs and behaviour. This improved understanding may be used to generate more informed insights about consumer needs and behaviour and ultimately create more relevant, personalised, and enjoyable shopping experiences for the consumer.
WESTFIELD CORPORATION PROPOSAL // PAGE 19 SECTION 2 FREQUENTLY ASKED QUESTIONS
Item Question Answer Where to find more (FAQ) information 2. Overview of OneMarket (continued) 2.3 When will OneMarket start OneMarket is in the process of developing its platform, building Section 4.6 offering products? its network and rolling out its products that are intended to be offered in the initial phases of its development. OneMarket currently offers its Shopper Exchange, Intelligent Parking Technology and Live Receipts product. In 2018 OneMarket also expects to offer its Shopper Intelligence product. 2.4 What business partners OneMarket has entered into 3 network participation 8.7(c) does OneMarket currently agreements including with: have contracted? –– Unibail-Rodamco/Westfield (through Westfield Property Management, LLC and Westfield Europe Limited) under which, subject to certain conditions being satisfied, Westfield has signed up for OneMarket’s Shopper Exchange product and elements of OneMarket’s Shopper Intelligence and Shopper Profile products for certain Westfield venues based on Westfield’s needs, including Westfield’s flagship properties in the United States and the United Kingdom. In addition, Unibail-Rodamco/Westfield (through Westfield Property Management, LLC and Westfield Europe Limited) and OneMarket have entered into a term sheet under which they agree to negotiate in good faith an agreement for Westfield to sign up for OneMarket’s Intelligent Parking Technology product by 15 April 2018 –– Nordstrom, Inc. under which Nordstrom has signed up for OneMarket’s Shopper Exchange and Live Receipts products The network participation agreements are broadly on similar terms. A summary of the key terms of the NPA with Westfield is set out in section 8.7(c). 2.5 When will OneMarket be OneMarket is an early stage start-up. It is not possible profitable? to estimate when, or if ever, OneMarket will ultimately be profitable. 2.6 Can I expect to receive a No. Not based on OneMarket’s current expectations. Any dividend from OneMarket return on your OneMarket Shares is only likely to be achieved Limited? by selling them. 2.7 Will Westfield retain an Yes. The merged Unibail-Rodamco/Westfield group will Sections 4.8 and 8.7 interest in OneMarket? initially retain a 10% interest in OneMarket’s business through Westfield’s holding of 10% in OM Delaware, OneMarket Limited’s principal United States Subsidiary. This shareholding will be diluted by the implementation of the 2018 Equity Incentive Plan as described in section 4.12 of this Demerger Booklet.
PAGE 20 // WESTFIELD CORPORATION PROPOSAL Item Question Answer Where to find more (FAQ) information 2.8 How does OneMarket On the Demerger Implementation Date, the OneMarket Group Section 4.9 intend to fund its is currently expected to have cash and cash equivalents of business plan? approximately $160 million. Having considered its current business plan and related cash needs, OneMarket believes that its cash and cash equivalents after taking into account the cash flow outcome from operations, initial set-up costs for corporate functions (and including an allowance for potential closure costs were that to occur), will be sufficient to meet its anticipated cash needs until late 2019. In respect of future capital requirements, this may include funding relationships with potential and existing network participants, strategic relationships with entities seeking to develop similar networks in countries outside the United States and special arrangements with network participants. OneMarket may actively seek additional funding sources or equity partners during 2018. It is possible that equity could be raised through OneMarket Limited or its United States Subsidiary, OM Delaware. It is currently anticipated to be more likely that equity will be raised at the OM Delaware level. This is because OneMarket expects that new investors are likely to be United States based or based outside Australia. It can be expected that investors of this kind would prefer a direct investment into the US holding company, despite the reduced liquidity associated with an investment in such entity compared to an investment in OneMarket Limited. Capital raised through OneMarket Limited could be in the form of equity or debt, including equity raised through private placements or through entitlement offerings to existing holders. Capital raised through OM Delaware could be in the form of a variety of capital or debt instruments. 2.9 Who will be on the board On the Demerger Implementation Date the Board of Section 4.10 of OneMarket Limited? OneMarket Limited will comprise: Steven Lowy (Non-executive Chairman) Donald Kingsborough (Chief Executive Officer) Ilana Atlas (Non-executive Director) Mark Johnson (Non-executive Director) Brian Long (Non-executive Director)
WESTFIELD CORPORATION PROPOSAL // PAGE 21 SECTION 2 FREQUENTLY ASKED QUESTIONS
Item Question Answer Where to find more (FAQ) information 2. Overview of Onemarket (continued) 2.10 What are the risks OneMarket Limited is an early stage technology company that Section 6 associated with continues to incur significant costs in seeking to develop its an investment in network and products and has a limited operating history. Section OneMarket Limited? 6 outlines some of the key risks associated with an investment in OneMarket Limited. Some of those key risks include: –– OneMarket’s limited operating history and early stage business strategy –– The failure to retain existing network participants, quickly attract new network participants and sell products to network participants –– The risk that OneMarket fails to continue to develop new products and provide innovative solutions and execute on its business strategy and vision –– The risk that OneMarket’s network and related products have recently been developed or are still under development and remain relatively untested –– The risk that OneMarket may not be able to achieve or sustain revenue growth –– The risk that investors in OneMarket Limited will have their investment in OneMarket diluted through the introduction of new investors or that OneMarket will be unable to raise additional funding –– The risk of data losses, data corruption and security breaches –– The risk of competitors developing similar products, potentially having greater resources than OneMarket –– The risk of regulatory impediments to OneMarket developing its network and products, particularly in the areas of privacy and the use of data –– The risk that OneMarket may be unable to attract or retain key personnel or effectively manage succession –– Adverse general economic and market conditions and reductions in technology spending –– The risk in expanding outside the United States –– Risks relating to implementation of the Demerger
PAGE 22 // WESTFIELD CORPORATION PROPOSAL Item Question Answer Where to find more (FAQ) information 2.11 What ongoing Unibail-Rodamco/Westfield (through Westfield Property Section 8.7 arrangements will Westfield Management, LLC and Westfield Europe Limited) and and OneMarket have with OneMarket have entered into a network participation each other following the agreement under which, subject to certain conditions Demerger? being satisfied, Westfield has signed up for OneMarket’s Shopper Exchange product and elements of OneMarket’s Shopper Intelligence and Shopper Profile products for certain Westfield venues based on Westfield’s needs, including Westfield’s flagship properties in the United States and the United Kingdom. A summary of the key terms of that Network Participation Agreement is set out in section 8.7(c). In addition, Unibail-Rodamco/Westfield (through Westfield Property Management, LLC and Westfield Europe Limited) and OneMarket have entered into a term sheet under which they agree to negotiate in good faith an agreement for Westfield to sign up for OneMarket’s Intelligent Parking Technology product by 15 April 2018. Westfield and OneMarket have also entered into a service agreement relating to the migration of certain products and services from OneMarket to Westfield as well as pilot agreements whereby Westfield has agreed to participate in the pilot programs for certain of OneMarket’s products. In addition, OneMarket Limited, Westfield (through WCL Holdings, Inc) and OM Delaware have entered into certain agreements which, along with OM Delaware’s certificate of incorporation, contain specific rights, obligations and agreements (including provisions related to the composition of its board of directors) of these parties as owners of OM Delaware’s common stock. 3. Overview of the Demerger 3.1 What is the effect of If: Sections 3.7 and 3.8 approving the Demerger? –– the Demerger Scheme is approved by the Requisite Majority at the Demerger Scheme Meeting; –– the Capital Reduction is approved by Requisite Majority at the General Meetings; –– the Demerger Scheme is approved by the Scheme Court; and –– all other Conditions Precedent to the Demerger are satisfied (including the Unibail-Rodamco Schemes becoming Effective) or waived, then the Demerger will be implemented. If the Demerger is implemented OneMarket will be separated from Westfield and Eligible Westfield Shareholders (other than Selling Shareholders) will receive the Demerger Consideration being one OneMarket Share for every 20 Westfield Shares held as at the Demerger Record Date. 3.2 Who is entitled to If you are registered as a Westfield Shareholder on the Section 3.5 participate in the Westfield Register on the Demerger Record Date, you will be Demerger? entitled to participate in the Demerger.
WESTFIELD CORPORATION PROPOSAL // PAGE 23 SECTION 2 FREQUENTLY ASKED QUESTIONS
Item Question Answer Where to find more (FAQ) information 3. Overview of the Demerger (continued) 3.3 What happens if the If the Demerger Scheme does not proceed: Demerger Scheme does –– the Demerger Dividend will not be paid; not proceed? –– the Capital Reduction will not proceed; –– Eligible Westfield Shareholders will not receive OneMarket Shares and the Selling Shareholders will not receive the proceeds from the sale of OneMarket Shares under the Sale Facility; and –– OneMarket Limited will remain a wholly owned subsidiary of Westfield and will, if the Unibail-Rodamco Schemes proceed, form part of the New Unibail-Rodamco group. In these circumstances, the consideration payable pursuant to the Unibail-Rodamco Schemes will not increase to take into account the fact that OneMarket will form part of the New Unibail-Rodamco group. 3.4 Did Westfield consider The Westfield Board considered a range of alternatives to Section 3.11 other alternatives to the the Demerger, including a sale of the OneMarket business, Demerger? the closure of the OneMarket business, a demerger of the OneMarket business to an unlisted entity, delaying the separation of OneMarket from the combined Unibail- Rodamco/Westfield group and the demerger of the OneMarket business to an entity listed on a stock exchange other than ASX (including a United States exchange). The Westfield Board determined that an ASX Listing of OneMarket Limited provides Westfield Shareholders with the best opportunity to realise additional value to the Unibail-Rodamco Scheme Consideration and is the best structure to achieve a separation of the OneMarket business at the same time as the implementation of the Unibail-Rodamco Schemes. Westfield’s Board believes that ultimately OneMarket will be better positioned as an independent company given its technology focus, financial profile and ability to develop its products as a standalone industry network. 4. The Demerger Consideration 4.1 What consideration will I If the Demerger is implemented, Eligible Westfield Shareholders Sections 3.5, 3.6 and 3.7 receive if the Demerger is (other than Selling Shareholders) will receive the Demerger implemented? Consideration being one OneMarket Share for every 20 Westfield Shares held as at the Demerger Record Date. Selling Shareholders (being Small Shareholders who have elected to sell the OneMarket Shares and Ineligible Foreign Holders) will not receive OneMarket Shares. Instead the OneMarket Shares to which they would have become entitled will be sold on market through the Sale Facility and the Sale Facility Proceeds will be dispatched to Selling Shareholders as soon as practicable. The estimated date of dispatch of the Sale Facility Proceeds to Selling Shareholders is currently expected to be at the end of July 2018. Please refer to section 3.6 for further details of the Sale Facility.
PAGE 24 // WESTFIELD CORPORATION PROPOSAL Item Question Answer Where to find more (FAQ) information 4.2 Will I be able to trade OneMarket Limited has applied for admission to the Official List Section 3.7(c) OneMarket Shares on and for Official Quotation of all OneMarket Shares on the ASX. the ASX? The Demerger is conditional on the ASX approving the admission of OneMarket Limited to the Official List and granting permission for Official Quotation of OneMarket Shares, subject to any conditions that ASX may reasonably require and which may be acceptable to the Westfield Board. If the Demerger becomes Effective, OneMarket Shares will trade under the code “OMN”, and are expected to commence trading on a deferred settlement basis on or about 31 May 2018 and on a normal settlement basis on or about 11 June 2018. 4.3 When will I receive the If the Demerger Scheme becomes Effective, Eligible Section 3.7 Demerger Consideration? Westfield Shareholders (other than Selling Shareholders) will have their names entered into the OneMarket Register and receive the Demerger Consideration on the Demerger Implementation Date. 4.4 How will I receive the Westfield Corporation will transfer OneMarket Shares to Eligible Section 3.7 OneMarket Shares? Westfield Shareholders (other than Selling Shareholders), and will enter the name of Eligible Westfield Shareholders (other than Selling Shareholders) on the OneMarket Register as the holder of one OneMarket Share for every 20 Westfield Shares held on the Demerger Record Date. 4.5 How will fractional Where the calculation of the aggregate number of OneMarket Section 3.7(a) entitlements be treated? Shares to be transferred to a particular Demerger Participant would result in the transfer of a fraction of a OneMarket Share, the aggregate number will be rounded up to the nearest whole number of OneMarket Shares. However, if Westfield Corporation is of the opinion that a Demerger Participant has been party to shareholding splitting or division in an attempt to obtain unfair advantage by reference to any rounding provided for in the calculation of each Demerger Participant’s entitlement to OneMarket Shares, then Westfield Corporation reserves the right to round the entitlement of such holdings so as to provide only the number of OneMarket Shares that would have been received but for the splitting or division. Any cash payable to a Demerger Participant will be rounded down to the nearest whole cent. 4.6 What are the tax Section 7 provides a general outline of the Australian income Section 7 implications of the tax, capital gains tax and stamp duty consequences of the Demerger? Demerger for Westfield Shareholders. You should consult with your own tax adviser in light of current tax laws and your particular circumstances before making a decision as to whether or not to vote in favour of the Demerger Scheme and the related Capital Reduction.
WESTFIELD CORPORATION PROPOSAL // PAGE 25 SECTION 2 FREQUENTLY ASKED QUESTIONS
Item Question Answer Where to find more (FAQ) information 4. The Demerger Consideration (continued) 4.7 What if I am an Ineligible A Demerger Participant will be an Ineligible Foreign Holder for Sections 3.6(a) and 3.6(c) Foreign Holder? the purpose of the Demerger if their registered address on the Westfield Register as at the Demerger Record Date is a place outside Australia and its external territories and New Zealand, unless Westfield has determined that it is lawful and not unduly onerous or impracticable to transfer OneMarket Shares to that Demerger Participant under the Demerger. Refer to section 3.6(a) for further information on jurisdictions where Demerger Participants will not be classified as Ineligible Foreign Holders. Any securities referred to in this Demerger Booklet have not been and will not be registered under the US Securities Act, or any state securities laws in the United States, and any securities issued to persons in the United States or to, or for the account or benefit of, US persons will only be made pursuant to a transaction that is not required to be registered under the US Securities Act or under applicable state securities laws. Ineligible Foreign Holders are ineligible to receive OneMarket Shares under the Demerger. If you are an Ineligible Foreign Holder, the number of OneMarket Shares to which you would have become entitled on the implementation of the Demerger will be transferred to the Sale Agent. The Sale Agent will sell those OneMarket Shares through the Sale Facility. Please refer to Section 3.6 for further details of the Sale Facility. 4.8 What if I am a Small Westfield Shareholders who individually hold 10,000 or fewer Sections 3.6(b) and 3.6(c) Shareholder? Westfield Shares at the Demerger Record Date will be Small Shareholders. Small Shareholders who do not wish to receive OneMarket Shares may elect to participate in the Sale Facility by completing and returning the enclosed Demerger Sale Facility Election Form so that it is received by the Westfield Registry by 5.00pm on 30 May 2018. If you are a Small Shareholder as at the Demerger Record Date who has made a valid Demerger Sale Facility Election and has not withdrawn that election, the number of OneMarket Shares to which you would have become entitled on the implementation of the Demerger will be transferred to the Sale Agent. The Sale Agent will sell those OneMarket Shares through the Sale Facility and remit the Sale Proceeds to you. Please refer to Section 3.6 for further details of the Sale Facility. 4.9 Can I choose to receive There is no option to elect to receive cash instead of cash instead of OneMarket OneMarket Shares. Shares? Small Shareholders who have elected not to receive OneMarket Shares and Ineligible Foreign Holders will automatically have the OneMarket Shares to which they would have become entitled sold through the Sale Facility. Once OneMarket Shares have commenced trading on ASX, you may seek to sell some or all of your OneMarket Shares on ASX.
PAGE 26 // WESTFIELD CORPORATION PROPOSAL Item Question Answer Where to find more (FAQ) information 4.10 What is the Sale Facility? The Sale Facility will be used to sell OneMarket Shares that Section 3.6 otherwise would have been received by: –– Ineligible Foreign Holders; and –– Small Shareholders as at the Demerger Record Date who have lodged a valid Demerger Sale Facility Election Form and has not withdrawn that election. Under the Sale Facility, the Sale Agent will, as soon as reasonably practicable (and in any event no more than 40 days after the Demerger Implementation Date), sell those OneMarket Shares on market. The Sale Facility Proceeds free of any brokerage costs or stamp duty will be dispatched to Selling Shareholders as soon as practicable. It is anticipated that the Sale Facility Proceeds will be dispatched by the end of July 2018. The Sale Facility Proceeds will be calculated on an average basis so that all Selling Shareholders receive the same price for each OneMarket Share sold on their behalf. Selling Shareholders will not receive any interest on the Sale Facility Proceeds relating to their OneMarket Shares. 4.11 Can I apply for more There is no option to apply for more OneMarket Shares OneMarket Shares? through the Demerger process. However, once OneMarket Shares have commenced trading on ASX, you may seek to acquire OneMarket Shares on market. 4.12 Will I have to pay brokerage No brokerage fees or stamp duty will be payable by Westfield Section 1.1(g) fees or stamp duty? Shareholder on the transfer to them of OneMarket Shares under the Demerger. 5. Demerger Scheme Meeting, voting and approvals 5.1 When and where will the The Demerger Scheme Meeting will be held at 11.00am (or as Section 3.3(a) Demerger Scheme Meeting soon thereafter as the Unibail-Rodamco Transaction Meetings Annexure C be held? conclude) on 24 May 2018 at Centennial Hall, Sydney Town Hall, 483 George St, Sydney. 5.2 What am I being asked to At the Demerger Scheme Meeting, you are being asked to Section 3.3(a) vote on at the Demerger vote on whether to approve the Demerger Scheme by voting in Annexure C Scheme Meeting? favour, or against, the Demerger Scheme Resolution. The text of the Demerger Scheme Resolution is set out in the Notice of Demerger Scheme Meeting in Annexure C. 5.3 What vote is required to For the Demerger Scheme to proceed, votes “in favour of” the Section 3.3(a) approve the Demerger resolution to approve the Demerger Scheme at the Demerger Annexure C Scheme? Scheme Meeting must be received from a Requisite Majority of Shareholders. A Requisite Majority is: –– a majority in number (more than 50%) of Westfield Shareholders, who are present and voting either in person or by proxy, attorney or, in case of corporate Westfield Shareholders, by corporate representative); and –– at least 75% of the total number of votes cast on the resolution to approve the Demerger Scheme. It is also necessary for the Scheme Court to approve the Demerger Scheme before it can become Effective. 5.4 Am I entitled to vote at If you are registered as a Westfield Shareholder on the Section 3.3(a) the Demerger Scheme Westfield Register at 7.00pm on 22 May 2018, you will be Annexure C Meeting? entitled to vote at the Demerger Scheme Meeting.
WESTFIELD CORPORATION PROPOSAL // PAGE 27 SECTION 2 FREQUENTLY ASKED QUESTIONS
Item Question Answer Where to find more (FAQ) information 5. Demerger Scheme Meeting, voting and approvals (continued) 5.5 How do I vote? You may vote in person by attending the Demerger Scheme Proxy form enclosed with Meeting to be held at 11.00am (or as soon thereafter as the this Demerger Booklet Unibail-Rodamco Transaction Meetings conclude) on 24 Summary – page 10 May 2018. Alternatively, you may vote by completing and Annexure C lodging the red proxy form that is enclosed with this Demerger Booklet. The proxy form can be lodged in person, by mail, by fax or electronically by visiting www.investorvote.com.au or scanning the QR code on the red proxy form. You can also vote by appointing a corporate representative (if you are a corporate shareholder) or an attorney. Full details of how to vote and how to lodge a proxy form, corporate representative appointment or power of attorney are set out on page 10 (“How do I vote”). 5.6 Should I vote at the Voting is not compulsory. However, your Westfield Directors Demerger Scheme believe that the Demerger is important to Westfield Meeting? Shareholders and your Directors unanimously recommend that you vote in favour of the Demerger Scheme. 5.7 What happens if I do not If you do not vote or if you vote against the Demerger vote, or vote against the Scheme, the Demerger Scheme may still be implemented Demerger Scheme? and binding on all Westfield Shareholders if the Demerger Scheme Resolution is passed by the Requisite Majority, the Scheme Court approves the Demerger Scheme and all other Conditions Precedent to the Demerger Scheme are satisfied or waived. This means that you may still be bound by the Demerger Scheme even if you have not voted or if you voted against the Demerger Scheme. 5.8 When will the results of the The results of the Demerger Scheme Meeting will be available www.westfieldcorp.com Demerger Scheme Meeting shortly after the conclusion of the Demerger Scheme Meeting be known? and will be announced to ASX once available. The results will also be published on www.westfieldcorp.com soon after the Demerger Scheme Meeting. 6. General Meeting, voting and approvals 6.1 When and where will the The General Meeting will also be held at 11.00am (or as soon Section 3.3(b) General Meeting be held? thereafter as the Unibail-Rodamco Transaction Meetings Annexure D conclude) on 24 May 2018 at Centennial Hall, Sydney Town Hall, 483 George St, Sydney. 6.2 What am I being asked If the aggregate amount of the Distribution exceeds Section 3.3(b) to vote on at the General A$150,000,000, the amount by which the Distribution exceeds Annexure D Meeting? A$150,000,000 will be returned to Westfield Shareholders through the Capital Reduction (which together with the Demerger Dividend, will form the consideration for the transfer of the OneMarket Shares to Westfield Shareholders). At the General Meeting, you are being asked to vote on whether to approve the Capital Reduction by voting in favour, or against, the Capital Reduction Resolution. The Demerger Scheme can only be implemented if the Capital Reduction Resolution is passed by a simple majority of votes cast at the General Meeting. The Capital Reduction (if any) is conditional on the Demerger Scheme becoming Effective. This means that Westfield will not undertake the Capital Reduction unless the Demerger Scheme becomes Effective. The text of the Capital Reduction Resolution is set out in the Notice of General Meeting in Annexure D.
PAGE 28 // WESTFIELD CORPORATION PROPOSAL Item Question Answer Where to find more (FAQ) information 6.3 What vote is required For the Capital Reduction to be approved, the Capital Section 3.3(b) to approve the Capital Reduction Resolution must be passed by a simple majority Annexure D Reduction? (more than 50%) of the votes cast by Westfield Shareholders on the Capital Reduction Resolution. 6.4 Am I entitled to vote at the If you are registered as a Westfield Shareholder on the Section 3.3(b) General Meeting? Westfield Register at 7.00pm on 22 May, you will be entitled to Annexure D vote at the General Meeting. 6.5 How do I vote? You may vote in person by attending the General Meeting Proxy form enclosed with to be held at 11.00am (or as soon thereafter as the Unibail- this Demerger Booklet Rodamco Transaction Meetings conclude) on 24 May 2018. Summary – page 10 Alternatively, you may vote by completing and lodging the Annexure D blue proxy form that is enclosed with this Demerger Booklet. The proxy form can be lodged in person, by mail, by fax or electronically by visiting www.investorvote.com.au or scanning the QR code on the blue proxy form. You can also vote by appointing a corporate representative (if you are a corporate shareholder) or an attorney. Full details of how to vote and how to lodge a proxy form, corporate representative appointment or power of attorney are set out on page 10 (“How do I vote”). 7. Voting considerations for the Demerger 7.1 What do your Westfield The Westfield Directors believe that the Demerger Scheme and Section 1 Directors recommend? the related Capital Reduction (if any) are in the best interests of Westfield Shareholders. The Westfield Directors unanimously recommend that Westfield Shareholders vote in favour of the Demerger Scheme at the Demerger Scheme Meeting and the Capital Reduction at the General Meeting. The basis for this recommendation is set out in section 1.1. Section 1.2 includes a summary of the possible reasons not to vote for the Demerger. 7.2 How do your Westfield Each Westfield Director who owns or controls Westfield Shares Section 1 Directors intend to vote? intends to vote in favour of the Demerger Scheme and the related Capital Reduction. 7.3 What is the Independent Grant Samuel & Associates Pty Limited has concluded that the Annexure A Expert’s conclusion? Demerger is in the best interests of Westfield Shareholders. Grant Samuel & Associates Pty Limited notes that if the Unibail-Rodamco Transaction is approved, but Westfield Shareholders vote against the Demerger, there will be no change to the consideration to be paid by Unibail-Rodamco to Westfield Securityholders (i.e. there is no increase to reflect the value of, or the cash within, OneMarket). Accordingly, if the Unibail-Rodamco Transaction is approved but the Demerger is not, Westfield Securityholders will, in aggregate, effectively give up a potential 90% interest in the OneMarket business for nil consideration (although, as they will have a 28% interest in New Unibail-Rodamco, their effective loss is 64.8% of the value of OneMarket). The Independent Expert’s Report is set out in full in Annexure A.
WESTFIELD CORPORATION PROPOSAL // PAGE 29 SECTION 2 FREQUENTLY ASKED QUESTIONS
Item Question Answer Where to find more (FAQ) information 7. Voting considerations for the Demerger (continued) 7.4 Why should I vote in favour Reasons why you should consider voting in favour of the Section 1.1 of the Demerger? Demerger Scheme and the related Capital Reduction are set out in section 1.1, and include: –– Westfield Shareholders will have greater economic exposure to the potential value upside of OneMarket if it is demerged –– Westfield Shareholders are not being asked to make any financial commitment to receive OneMarket Shares pursuant to the Demerger –– The establishment of OneMarket as an independent entity will assist OneMarket’s business strategy –– A standalone OneMarket has an enhanced ability to pursue its own growth agenda and strategic priorities –– OneMarket will be able to adopt a capital structure appropriate for its scale, operations and strategic objectives –– The Independent Expert has concluded that the Demerger is in the best interests of Westfield Shareholders –– No brokerage or stamp duty will be payable under the Demerger Scheme and the related Capital Reduction 7.5 Why might I consider not Reasons why you might consider not voting in favour of the Section 1.2 voting in favour of the Demerger Scheme and the related Capital Reduction are set Demerger? out in section 1.2, and include: –– OneMarket is an early stage start-up and there is significant risk associated with its activities –– OneMarket has no track record operating on a standalone basis, which may reduce its ability to access funding and capital markets or impact the trading price of OneMarket Shares –– There will be one-off transaction costs associated with the transaction –– OneMarket will no longer have financial support from Westfield to fund its activities –– There will be additional corporate and operating costs as a consequence of the Demerger –– The Westfield Directors believe that there is likely to be a high degree of turnover in the register following the Demerger –– As there has been no public trading market for OneMarket Shares, an active trading market for OneMarket Shares may not develop, or if it develops may not be sustained
PAGE 30 // WESTFIELD CORPORATION PROPOSAL Item Question Answer Where to find more (FAQ) information 8. Conditions Precedent and implementation of the Demerger 8.1 What are the Conditions The Demerger is subject to a number of Conditions Precedent. Section 3.4 Precedent to the The key Conditions Precedent are, in summary: Annexure E Demerger? –– The Demerger Scheme being approved by the Requisite Majority at the Demerger Scheme Meeting –– The Capital Reduction being approved by the Requisite Majority of votes at the General Meeting –– The Unibail-Rodamco Schemes being approved by the Scheme Court at the second court hearing for that proposal –– The Demerger Scheme being approved by the Scheme Court at the Second Court Hearing –– ASX approves the admission of OneMarket Limited to the Official List and grants permission for Official Quotation of OneMarket Shares, subject to any conditions that ASX may reasonably require and which may be acceptable to the Westfield Board The Conditions Precedent to the Demerger are set out in full in the Demerger Scheme which is in Annexure E. 8.2 When will the Demerger The Demerger Scheme will become Effective on the date Section 3.1(a) – Step 4 Scheme become Effective? on which the Scheme Court order approving the Demerger Scheme is lodged with ASIC. The Demerger Scheme is currently expected to become Effective on 30 May 2018. 8.3 What happens On the Demerger Implementation Date: Section 3.7 on the Demerger –– the Westfield Board will determine to pay the Demerger Implementation Date? Dividend in accordance with the Demerger Dividend Resolution; –– Westfield will reduce the capital of each Westfield Share by the Capital Reduction Amount (if any) in accordance with the Capital Reduction Resolution; –– Westfield will apply the Distribution Entitlement in respect of each Demerger Participant in accordance with the terms of the Demerger Scheme; and –– Westfield Corporation will transfer the OneMarket Shares to Eligible Westfield Shareholders (other than Selling Shareholders) or to the Sale Agent (in respect of Selling Shareholders) and register the transfer in the OneMarket Register. The Demerger Implementation Date is currently expected to be on 7 June 2018. 9. Other 9.1 What if I have further If you have any further questions about the Scheme please Securityholder Information questions about the call the Shareholder Information Line on 1300 132 211 (within Line on 1300 132 211 Demerger? Australia) or +61 3 9415 4070 (outside Australia) between (within Australia) or 9.00am to 5.00pm (Sydney time) Monday to Friday, or visit +61 3 9415 4070 (outside the website www.westfieldcorp.com/investors/transaction- Australia) between information. Please note, the Securityholder Information Line 9.00am to 5.00pm cannot provide any financial, taxation or investment advice and Monday to Friday cannot comment on the merits of the Demerger. www.westfieldcorp.com/ investors/transaction- information
WESTFIELD CORPORATION PROPOSAL // PAGE 31 SECTION 3 DETAILS OF THE DEMERGER
This section contains details of the Demerger, the steps to implement the Demerger and the required approvals for the Demerger to proceed. 3.1 Overview (b) The Distribution (a) Background The Demerger will be effected by the Distribution, and implemented by the Demerger Scheme. The Distribution, On 12 December 2017, Westfield announced a combination consisting of the Demerger Dividend and the Capital with Unibail-Rodamco which, if implemented, will result in Reduction (if any), is a necessary step in the process of Westfield being acquired by Unibail-Rodamco. At the same effecting the Demerger. time Westfield announced a separate proposal which, if implemented, will result in the demerger of OneMarket. The Distribution Entitlement, consisting of the Demerger OneMarket Limited has applied for admission to the Official Dividend Entitlement and the Capital Reduction Entitlement List of ASX. Both the Demerger and the Unibail-Rodamco (if any), will not be paid to Demerger Participants in cash Transaction will be implemented by way of separate but will instead be applied on behalf of the Demerger schemes of arrangement pursuant to Part 5.1 of the Participants as consideration for the transfer of OneMarket Corporations Act. The Distribution by Demerger Dividend Shares under the Demerger Scheme. and Capital Reduction (if any) is also a necessary step in The aggregate amount of the Distribution will be an amount implementing the Demerger. equal to the market of all OneMarket Shares calculated by The Demerger is conditional on the Unibail-Rodamco reference to the VWAP of OneMarket Shares for the first ten Schemes proceeding. However, the Unibail-Rodamco Business Days starting from the date of the commencement Schemes are not conditional on the Demerger proceeding. of trading of OneMarket Shares on ASX (including on a The Unibail-Rodamco Schemes are a separate transaction deferred settlement basis). to the Demerger and full details of the Unibail-Rodamco The Demerger Dividend is a component of the Distribution. Transaction and the Unibail-Rodamco Scheme are not The aggregate amount of the Demerger Dividend will be included in the Demerger Booklet. For information relating to the lower of A$150,000,000 and the aggregate amount the Unibail-Rodamco Transaction and the Unibail-Rodamco of the Distribution. If the Demerger becomes Effective, the Schemes, please refer to the Unibail-Rodamco Transaction Westfield Board will declare and pay the Demerger Dividend Securityholder Booklet, which was sent to Westfield Stapled as a dividend to Demerger Participants. Securityholders at the same time as this Demerger Booklet. The payment of the Demerger Dividend is conditional on If the Demerger Scheme becomes Effective then: the Demerger Scheme becoming Effective. You will not —— Eligible Westfield Shareholders (other than Selling receive any cash in respect of the Demerger Dividend. Shareholders) will receive the Demerger Consideration; Under the Demerger Scheme, Westfield will apply the Demerger Dividend Entitlement (together with the Capital —— OneMarket will be demerged from Westfield; and Reduction Entitlement) as consideration for the transfer of —— the ASX Listing will proceed. the OneMarket Shares to Westfield Shareholders In order for the Demerger Scheme to become Effective, The Demerger Dividend does not require the approval of a number of Conditions Precedent must either be satisfied Westfield Shareholders. of waived. These Conditions Precedent are summarised in section 3.4 of this Demerger Booklet and are set out in full in the Demerger Scheme of Arrangement in Annexure E.
PAGE 32 // WESTFIELD CORPORATION PROPOSAL If the aggregate amount of the Distribution exceeds —— Step 4: Effective Date: The Demerger Scheme will $150,000,000, the amount by which the Distribution become Effective on the date on which the office exceeds $150,000,000 will be returned to Westfield copy of the order of the Scheme Court under Section Shareholders through the Capital Reduction. The Capital 411(10) of the Corporations Act approving the Reduction (if any) is a return of capital to Westfield Demerger Scheme is lodged with ASIC or such other Shareholders on their Westfield Shares. The Demerger date as the Scheme Court determines or specifies Scheme is conditional on the Capital Reduction Resolution in the order. Westfield intends to lodge the order of being approved. the Scheme Court with ASIC on the next Business The Capital Reduction (if any) is an equal capital reduction Day after the Second Court Date, which is expected pursuant to section 256B(1) of the Corporations Act. You to be 30 May 2018. On the Effective Date, Westfield will not receive any cash under the Capital Reduction. Under will notify ASX that the Demerger Scheme has become the Demerger Scheme, Westfield will apply the Capital Effective. Once the Demerger Scheme becomes Reduction Entitlement (together with the Demerger Dividend) Effective, Westfield will become bound to implement as consideration for the transfer of the OneMarket Shares to the Demerger Scheme in accordance with its terms. Westfield Shareholders. Trading in Westfield Shares will be suspended from the close of trading on the Effective Date. Westfield Shareholders will be asked to approve the Capital Reduction at the General Meeting. —— Step 5: Demerger Record Date: Westfield Shareholders (other than Selling Shareholders) will be (c) Key steps entitled to receive the Demerger Consideration under The key steps to implement the Demerger are as follows: the Demerger if they are registered as the holders of —— Step 1: Westfield Stapled Securityholders vote Westfield Shares at 7.00pm on the Demerger Record on Unibail-Rodamco Schemes: Westfield Stapled Date. The Demerger Record Date is currently expected Securityholders will vote on whether to approve the to be 1 June 2018. Westfield Corporation will not Unibail-Rodamco Schemes at the Unibail-Rodamco accept for registration or recognise for any purpose, Transaction Meetings. Each Westfield Stapled any transfer or transmission application in respect Securityholder who is registered on the Westfield of Westfield Shares received after the Demerger Register at 7.00pm on 22 May 2018 is entitled to vote Record Date. at the Unibail-Rodamco Transaction Meetings. The —— Step 6: Demerger Implementation Date: If the Demerger will only occur if the relevant resolutions are Demerger Scheme becomes Effective, Westfield passed by the requisite majority of Westfield Stapled Corporation will declare and pay the Demerger Securityholders at the Unibail-Rodamco Transaction Dividend and undertake the Capital Reduction (the Meetings. Capital Reduction will only occur if the Distribution —— Step 2: Westfield Shareholders vote on Demerger exceeds A$150,000,000, see FAQs 1.7 and 1.8). Scheme and Capital Reduction: Westfield As a result, Demerger Participants will be credited Shareholders will vote on whether to approve the with their Distribution Entitlement on the Demerger Demerger Scheme and the Capital Reduction at the Implementation Date. The Demerger Implementation Demerger Scheme Meeting and General Meeting Date is currently expected to be 7 June 2018. respectively. Each Westfield Shareholder who is Under the Demerger Scheme, instead of Demerger registered on the Westfield Register at 7.00pm on Participants receiving their Distribution Entitlement 22 May 2018 is entitled to vote at the Demerger in cash, Westfield will automatically apply these Scheme Meeting and the General Meeting. The amounts as payment for the OneMarket Shares to Demerger will only occur if the Demerger Scheme be transferred to Eligible Westfield Shareholders or Resolution and the Capital Reduction Resolution the Sale Agent (in respect of the OneMarket Shares are passed by the Requisite Majorities of Westfield to which Selling Shareholders would otherwise Shareholders. be entitled). —— Step 3: Application for approval by the Scheme —— Step 7: ASX Listing of OneMarket Shares: Court: If the Unibail-Rodamco Schemes and Demerger OneMarket Limited has applied for ASX for admission Scheme are approved by the Requisite Majority and to the Official List and for Official Quotation of the Capital Reduction is approved by the Requisite OneMarket Shares on ASX. If the Demerger is Majority of votes cast, Westfield will apply to the implemented, OneMarket Shares will trade under the Scheme Court to approve the Demerger Scheme on code “OMN”, and are expected to commence trading the Second Court Date (expected to be 29 May 2018). on a deferred settlement basis on or about 31 May The Corporations Act and the relevant Scheme Court 2018 and on a normal settlement basis on or about rules provide a procedure for Westfield Shareholders 11 June 2018. to oppose the approval by the Scheme Court of the Demerger Scheme if they so wish.
WESTFIELD CORPORATION PROPOSAL // PAGE 33 SECTION 3 DETAILS OF THE DEMERGER
3.2 Internal restructuring and capitalisation of For the Demerger Scheme to proceed, votes “in favour OneMarket of” the resolution to approve the Demerger Scheme at As part of preparing OneMarket for the Demerger, Westfield the Demerger Scheme Meeting must be received from a has undertaken an internal restructuring of its subsidiaries Requisite Majority of Westfield Shareholders. A Requisite and assets (Restructure). Broadly, in accordance with the Majority is: Demerger Principle, the Restructure involved: —— a majority in number (more than 50%) of Westfield —— the incorporation of OneMarket Limited as a new Shareholders, who are present and voting either in Australian public company; person or by proxy, attorney or, in case of corporate Westfield Shareholders, by corporate representative; —— the incorporation of OneMarket Holdings, Inc and (formerly known as OM HoldCo, LLC) a new Delaware corporation (which is referred to in this —— at least 75% of the total number of votes cast by Demerger Booklet as OM Delaware). Following the Westfield Shareholders on the resolution to approve Demerger OM Delaware will initially be owned as to the Demerger Scheme. 90% by OneMarket Limited and as to 10% by the If the Demerger Scheme is approved by a Requisite Majority, Westfield Group (and the New Unibail-Rodamco and all Conditions Precedent to the Demerger Scheme are group following the Unibail-Rodamco Transaction). satisfied or, if applicable, waived, all Demerger Participants These shareholdings will be diluted pro rata by the will be bound by the Demerger Scheme, including those implementation of the 2018 Equity Incentive Plan as who voted against the Demerger Scheme and those who described in section 4.12 of this Demerger Booklet; did not cast a vote. —— the transfer of certain entities and assets to the If the Demerger Scheme is not approved by Westfield OneMarket Group which were previously held by Shareholders at the Demerger Scheme Meeting, the Subsidiaries of Westfield Corporation; Demerger will not proceed. —— the transfer of certain Westfield employees so that their The Demerger Scheme is subject to a number of Conditions employer is a member of the OneMarket Group; and Precedent which are described in section 3.4 and set out —— a net contribution of cash, such that the net cash of in full in the Demerger Scheme of Arrangement in Annexure the Westfield Group attributable to the OneMarket E. The Conditions Precedent to the Demerger Scheme Group as at 31 December 2017 was $197.0 million. include that the Capital Reduction is approved by Westfield Shareholders. This means that if the Capital Reduction 3.3 The Demerger procedure Resolution is not passed, the Demerger Scheme will not become Effective and the Demerger will not proceed. (a) Demerger Scheme Meeting The Westfield Directors unanimously believe that the In accordance with an order of the Scheme Court dated Demerger Scheme is in the best interests of Westfield 12 April 2018, Westfield has convened the Demerger Shareholders as a whole. The Westfield Directors Scheme Meeting to be held at 11.00am (or as soon unanimously recommend that Westfield Shareholders vote in thereafter as the Unibail-Rodamco Transaction Meetings favour of the Demerger Scheme Resolution, as they intend conclude) on 24 May 2018 at Centennial Hall, Sydney Town to do in respect of their own holdings of Westfield Shares. Hall, 483 George St, Sydney. The Independent Expert has also concluded that the At the Demerger Scheme Meeting, Westfield Shareholders Demerger is in the best interests of Westfield Shareholders. are being asked to approve the Demerger Scheme by voting in favour of the Demerger Scheme Resolution. (b) General Meeting The terms of the Demerger Scheme are set out in Annexure Westfield has convened the General Meeting of Westfield E and the Notice of Demerger Scheme Meeting is set Shareholders in accordance with section 249CA of the out in Annexure C. The fact that the Scheme Court has Corporations Act also to be held at 11.00am (or as soon ordered that the Demerger Scheme Meeting be convened thereafter as the Unibail-Rodamco Transaction Meetings is no indication that the Scheme Court has a view as to conclude) on 24 May 2018 at Centennial Hall, Sydney Town the merits of the Demerger Scheme or as to how Westfield Hall, 483 George St, Sydney. Shareholders should vote. On these matters, Westfield At the General Meeting, Westfield Shareholders are being Shareholders must reach their own decision. asked to approve the Capital Reduction by voting in favour Westfield Shareholders who are registered on the Westfield of the Capital Reduction Resolution. Register at 7.00pm on 22 May will be entitled to vote at the Details of the Capital Reduction Resolution are set out in the Demerger Scheme Meeting. Instructions on how to vote at Notice of General Meeting in Annexure D. the Demerger Scheme Meeting are set out on page 10 of this Demerger Booklet.
PAGE 34 // WESTFIELD CORPORATION PROPOSAL Westfield Shareholders who are registered on the Westfield (d) Scheme Court approval of the Demerger Scheme: Register at 7.00pm on 22 May 2018 will be entitled to Approval of the Demerger Scheme by the Scheme vote at the General Meeting. Instructions on how to vote Court at the Second Court Hearing. at the General Meeting are set out on page 10 of this (e) ASX Listing approval: ASX approves the admission Demerger Booklet. of OneMarket Limited to the Official List and grants For the Capital Reduction to proceed, votes “in favour permission for Official Quotation of OneMarket Shares, of” the resolution to approve the Capital Reduction at the subject to any conditions that ASX may reasonably General Meeting must be received from a simple majority require and which may be acceptable to the of votes cast at the General Meeting. Westfield Board. Westfield Corporation has proposed the Capital Reduction All of the Conditions Precedent to the Demerger are set out Resolution to permit Westfield Corporation to reduce its in the Demerger Scheme of Arrangement in Annexure E. If share capital on the Demerger Implementation Date. The all of the Conditions Precedent are not satisfied or waived by proceeds of the Capital Reduction (if any) will not be paid 30 September 2018 (or such other date agreed by Westfield in cash; instead, they will be applied (together with the and OneMarket Limited), then the Demerger Scheme will Demerger Dividend) on behalf of Westfield Shareholders as lapse and be of no effect and the Demerger will not proceed. consideration for the transfer of OneMarket Shares under As of the date of this Demerger Booklet, none of the the Demerger Scheme. Conditions Precedent have been satisfied. As of this The Capital Reduction is conditional on the Demerger Demerger Booklet, the Westfield Board is not aware of any Scheme becoming Effective. This means that Westfield circumstances that would cause a Condition Precedent not Corporation will not undertake the Capital Reduction (if any) to be satisfied. unless the Demerger Scheme Resolution is passed by the Requisite Majority and the Demerger Scheme becomes 3.5 Entitlement to participate in the Demerger Effective. Westfield Shareholders as at the Demerger Record Date will The Westfield Directors are of the view that, taking into participate in the Demerger. The way in which an individual account all relevant matters, the Capital Reduction (if any) Westfield Shareholder participates will depend on whether is fair and reasonable to Westfield Shareholders as a whole that Westfield Shareholder is: and will not materially prejudice the ability of Westfield —— an Eligible Westfield Shareholder; Corporation to pay its creditors. The Westfield Directors —— an Ineligible Foreign Holder; or unanimously recommend that Westfield Shareholders vote in —— a Small Shareholder who has lodged a valid Demerger favour of the Capital Reduction Resolution, as they intend to Sale Facility Election Form. do in respect of their own holdings of Westfield Shares. For the purposes of determining which Westfield The Independent Expert has also concluded that, in its Shareholders will be eligible to receive a Distribution opinion, the Capital Reduction will not materially prejudice Entitlement and participate in the Demerger, dealings in Westfield’s ability to pay its existing creditors. Westfield Shares will be recognised only if: 3.4 Conditions Precedent to the implementation of —— in the case of dealings of the type to be effected using the Demerger CHESS, the transferee is registered on the Westfield The Demerger will become binding on Westfield and Register as the holder of the relevant Westfield Shares Demerger Participants, and the Demerger will proceed if as at the Demerger Record Date; and all of the Conditions Precedent are satisfied or, if permitted, —— in all other cases, the registrable transfer or waived. The Conditions Precedent include: transmission applications in respect of those dealings (a) Approval of the Demerger Scheme: The Demerger are received by the Westfield Registry before the Scheme Resolution is duly passed by the Requisite Demerger Record Date with sufficient time to allow for Majority of Westfield Shareholders at the Demerger registration of the transferee on or before the Demerger Scheme Meeting. Record Date (and the transferee remains registered on the Demerger Record Date). (b) Approval of the Capital Reduction: The Capital Reduction Resolution is duly passed by the required Westfield will not accept for registration or recognise any majority of Westfield Shareholders at the General transfer or transmission application in respect of Westfield Meeting. Shares received after the Demerger Record Date, or received prior to that time but not in registrable form. (c) Scheme Court approval of the Unibail-Rodamco Schemes: Approval of the Unibail-Rodamco Schemes by the Scheme Court at the second court hearing to consider that proposal.
WESTFIELD CORPORATION PROPOSAL // PAGE 35 SECTION 3 DETAILS OF THE DEMERGER
The Distribution Entitlement will be satisfied by: Based on the information available to Westfield as at the —— one OneMarket Share being transferred to an date of this Demerger Booklet, Westfield Shareholders Eligible Westfield Shareholder (other than a Selling whose addresses are shown in the register on the Demerger Shareholder) for every 20 Westfield Shares held by Record Date as being in the following jurisdictions will be the Eligible Westfield Shareholder (other than a Selling entitled to have OneMarket Shares transferred to them Shareholder) at the Demerger Record Date; or pursuant to the Demerger subject to the qualifications, if any, set out below in respect of that jurisdiction: —— one OneMarket Share being transferred to the Sale Agent for every 20 Westfield Share held by the Selling (i) each Demerger Participant with an address as Shareholder at the Demerger Record Date. shown on the Westfield Register on the Demerger Record Date as being within any of the following Where the calculation of the aggregate number of places: the Bahamas, Canada, France, Malaysia, OneMarket Shares to be transferred to a particular the Netherlands, Papua New Guinea, Singapore, Demerger Participant would result in the transfer of a South Africa, Switzerland, the United Kingdom or fraction of a OneMarket Share, the aggregate number will the United States; be rounded up to the nearest whole number of OneMarket Shares. However, if Westfield Corporation is of the opinion (ii) each Demerger Participant with an address as shown that a Demerger Participant has been party to shareholding on the Westfield Register on the Demerger Record splitting or division in an attempt to obtain unfair advantage Date as being within China, where the Westfield by reference to any rounding provided for in the calculation Shareholder is a qualified domestic institutional of each Demerger Participant’s entitlement to OneMarket investor, sovereign wealth fund or quasi-government Shares, then Westfield Corporation reserves the right to investment fund; round the entitlement of such holdings so as to provide only (iii) each Demerger Participant with an address as shown the number of OneMarket Shares that would have been on the Westfield Register on the Demerger Record received but for the splitting or division. Date as being within Germany, where (i) the Westfield If you are a Westfield Shareholder as at the Demerger Shareholder is a “qualified investor” (within the meaning Record Date, the way in which you participate in the of the Prospectus Directive (Directive 2003/71/EC), Demerger will depend on whether you are an Eligible as amended and implemented in Germany) and (ii) Westfield Shareholder or a Selling Shareholder (being either the number of non-qualified investors is less than 150; an Ineligible Foreign Holder or a Small Shareholder who has (iv) each Demerger Participant with an address as shown lodged a valid Demerger Sale Facility Election Form). on the Westfield Register on the Demerger Record Westfield Shareholders who are not Selling Small Date as being Hong Kong, where (i) the Westfield Shareholders and who are not Ineligible Foreign Holders, Shareholder is a “professional investor” (as defined in will be Eligible Westfield Shareholders and will be entitled to the Securities and Futures Ordinance of Hong Kong) have OneMarket Shares transferred to them if the Demerger and (ii) the number of non-professional investors does is implemented. not exceed 50; Details of how Selling Shareholders will participate in the (v) each Demerger Participant with an address as shown Demerger are set out in section 3.6 below. on the Westfield Register on the Demerger Record Date as being within Ireland, where (i) the Westfield 3.6 Selling Shareholders and Sale Facility Shareholder is a “qualified investor” (within the meaning (a) Ineligible Foreign Holders of the Prospectus Directive (Directive 2003/71/EC), as amended and implemented in Ireland) and (ii) the A Demerger Participant will be an Ineligible Foreign Holders number of non-qualified investors is less than 150; for the purpose of the Demerger if their registered address on the Westfield Register as at the Demerger Record Date (vi) each Demerger Participant with an address as shown is a place outside Australia and its external territories on the Westfield Register on the Demerger Record and New Zealand, unless Westfield has determined that it Date as being within Japan, where the number of is lawful and not unduly onerous or impracticable to transfer Westfield Shareholders is less than 50; OneMarket Shares to that Demerger Participants under the (vii) each Demerger Participant with an address as shown Demerger. on the Westfield Register on the Demerger Record No action has been taken to register or qualify the Date as being within Norway, where (i) the Westfield OneMarket Shares or otherwise permit a public offering Shareholder is a “professional client” or (ii) the number of such securities in any jurisdiction outside Australia and of non-professional clients is less than 150; New Zealand.
PAGE 36 // WESTFIELD CORPORATION PROPOSAL (viii) each Demerger Participant with an address as shown Small Shareholders who do not wish to receive OneMarket on the Westfield Register on the Demerger Record Shares under the Demerger can elect not to do so by Date as being within South Korea, where (i) the completing and returning the enclosed Demerger Sale Westfield Shareholder is a “accredited investor” (as Facility Election Form so that it is received by the Westfield defined under the Financial Investment Services and Registry by 5.00pm on 30 May 2018. Capital Markets Act of Korea) or (ii) the number of Small Shareholders may withdraw their Demerger Sale non-accredited investors is less than 50; and Facility Election by lodging an Election Withdrawal Form, (ix) each Demerger Participant with an address as so that it is received by the Westfield Registry by 5.00pm shown on the Westfield Register on the Demerger on 30 May 2018. Record Date as being within Sweden, where (i) the Small Shareholders who do not validly lodge a Demerger Westfield securityholder is a “qualified investor” (within Sale Facility Election Form will receive OneMarket Shares the meaning of the Prospectus Directive (Directive pursuant to the Demerger and may keep, sell or otherwise 2003/71/EC), as amended and implemented in deal with the OneMarket Shares received by them. Sweden) and (ii) the number of non-qualified investors is less than 150. (c) Operation of the Sale Facility Nominees, custodians and other Westfield Shareholders The Sale Facility will be used to sell OneMarket Shares that who hold Westfield Shares on behalf of a beneficial owner would otherwise have been received by: resident outside Australia, New Zealand, the Bahamas, —— Ineligible Foreign Holders; and Canada, France, Malaysia, Papua New Guinea, Singapore, —— Small Shareholders who have made a valid Demerger South Africa, Switzerland and the United Kingdom may Sale Facility Election. not forward this Demerger Booklet (or accompanying documents) to anyone outside these countries without Such OneMarket Shares will be transferred to the Sale Agent the consent of Westfield. to be sold on their behalf under the Sale Facility. Ineligible Foreign Holders will participate in the Capital Under the Sale Facility, the Sale Agent will, as soon as Reduction on the same basis as all Eligible Westfield reasonably practicable (and in any event not more than Shareholders. However, OneMarket Shares will not be 40 days after the Demerger Implementation Date), sell for transferred to Ineligible Foreign Holders. Instead, each the benefit of each Selling Shareholder the OneMarket Ineligible Foreign Holder will be taken to have directed Shares on the ASX. The Sale Facility Proceeds will be Westfield Corporation to transfer the OneMarket Shares remitted to Selling Shareholders. to which they would otherwise be entitled to the Sale Agent. The Sale Agent will sell those OneMarket Shares on the ASX The OneMarket Shares to which the Ineligible Foreign at such price or prices and on such other terms as the Sale Holders would otherwise be entitled will be transferred to Agent determines in good faith (and at the risk of the Selling the Sale Agent on behalf of Ineligible Foreign Holders and Shareholders, as applicable), having due regard to the desire will be dealt with as described in section 3.6 (c). to achieve the best price reasonably available at the time of sale, ensuring that Selling Shareholders are treated fairly. (b) Small Shareholders As the market price of OneMarket Shares will be subject Small Shareholders are Eligible Westfield Shareholders who to change from time to time and the conversion of the individually hold 10,000 or fewer Westfield Shares as at sale proceeds may be subject to currency exchange the Demerger Record Date. If you are a Small Shareholder, movements, neither the sale price of those OneMarket you may elect not to receive OneMarket Shares under the Shares nor the proceeds of that sale can be guaranteed. Demerger by lodging a Demerger Sale Facility Election Form. After the ASX Listing, Selling Shareholders will be If a valid Demerger Sale Facility Election is made, you will be able to obtain information on OneMarket Shares on taken to have directed Westfield Corporation to transfer the https://www.onemarketnetwork.com/investorrelations. OneMarket Shares to which you would otherwise be entitled to the Sale Agent. All of the OneMarket Shares to which The amount of money received by each Selling Shareholder, you would otherwise be entitled under the Demerger will be being the Sale Facility Proceeds, will be calculated on an sold under the Sale Facility and the Sale Facility Proceeds averaged basis so that all Selling Shareholders receive the remitted to you (free of any brokerage costs or stamp duty same price for each OneMarket Share sold on their behalf, but excluding any interest and after deducting any applicable subject to rounding down to the nearest whole Australian withholding tax). cent (before any conversion of the Sale Facility Proceeds into Australian dollars, New Zealand dollars or US dollars (as applicable)). Consequently, the amount received by Selling Shareholders for each OneMarket Share may be more or less than the actual price that is received by the Sale Agent for that particular OneMarket Share. Any interest earned on sale proceeds will be retained by Westfield.
WESTFIELD CORPORATION PROPOSAL // PAGE 37 SECTION 3 DETAILS OF THE DEMERGER
The Sale Facility Proceeds will be remitted to a Selling On the Demerger Implementation Date the number of Shareholder (free of any brokerage costs or stamp duty but OneMarket Shares then on issue will be split into the after excluding any interest and deducting any applicable required number of OneMarket Shares required to be withholding tax) by: transferred pursuant to the Demerger. —— Direct credit to Selling Shareholders who have a Where the calculation of the aggregate number of nominated bank account noted in the Westfield OneMarket Shares to be transferred to a particular Register at the Demerger Record Date. The conversion Demerger Participant would result in the transfer of a rate for direct credit in each of the respective fraction of a OneMarket Share, the aggregate number will currencies will be set at the prevailing market rate. be rounded up to the nearest whole number of OneMarket —— By cheque in New Zealand dollars to Selling Shares. However, if Westfield Corporation is of the opinion Shareholders who have a registered address in that a Demerger Participant has been party to shareholding New Zealand and who do not have a nominated splitting or division in an attempt to obtain unfair advantage bank account noted in the Westfield Register at the by reference to any rounding provided for in the calculation Demerger Record Date. of each Demerger Participant’s entitlement to OneMarket Shares, then Westfield Corporation reserves the right to —— By cheque in Australian dollars to all other Selling round the entitlement of such holdings so as to provide Shareholders who do not have a nominated bank only the number of OneMarket Shares that would have been account noted in the Westfield Register at the received but for the splitting or division. Demerger Record Date. Any cash amount payable to a Demerger Participant will be It is anticipated that the Sale Facility Proceeds will be rounded down to the nearest whole cent. dispatched by the end of July 2018. Selling Shareholders will not receive any interest on the Sale Facility Proceeds relating Except for Eligible Westfield Shareholders’ tax file numbers, to their OneMarket Shares. any binding instruction or notification between an Eligible Westfield Shareholder and Westfield relating to Westfield The payment of the Sale Facility Proceeds from the sale of Shares as at the Demerger Record Date (including OneMarket Shares will be in full satisfaction of the rights any instructions relating to payment of dividends or to of Selling Shareholders under the Demerger. Full details of communications from Westfield, including bank account this process are contained in clause 5.13 of the Demerger details, email addresses and communication preferences) Scheme (which is set out in Annexure E). will, unless otherwise determined by OneMarket Limited, Under the Demerger, each Selling Shareholder appoints be deemed to be a similarly binding instruction or notification Westfield as its agent to receive on its behalf any financial to OneMarket in respect of relevant OneMarket Shares. services guide or other notices which may be issued by the OneMarket Shareholders may subsequently revoke or Sale Agent to that Selling Shareholder. amend such instructions or notifications online or by written 3.7 Implementation of the Demerger notice to OneMarket Limited at its registered address or at the OneMarket Registry. (a) Entitlement to and transfer of the OneMarket Shares (b) Consequences of approving the Demerger If the Demerger is implemented, Demerger Participants will be credited with their Distribution Entitlement. If the Scheme Court approves the Demerger Scheme and all other Conditions Precedent to the Demerger are satisfied Under the Demerger, in no circumstances will the Demerger or waived, then Westfield will lodge the Scheme Court Participants receive their Distribution Entitlement in cash. order approving the Demerger Scheme with ASIC. As a The entitlement of Demerger Participants to the Distribution consequence: Entitlement will be satisfied by: —— The Demerger Scheme will become Effective on the —— (Eligible Westfield Shareholders) one OneMarket Effective Date (currently expected to be 30 May 2018). Share being transferred to each Eligible Westfield Shareholder (other than Selling Shareholders) for every —— On the Demerger Implementation Date (currently 20 Westfield Shares held by that Eligible Westfield expected to be 7 June 2018): Shareholder at the Demerger Record Date. —— Westfield Corporation will declare and pay the —— (Selling Shareholders) one OneMarket Share being Demerger Dividend and, where the Distribution transferred to the Sale Agent for every 20 Westfield exceeds A$150,000,000, undertake the Capital Shares held by the Selling Shareholder at the Reduction; Demerger Record Date.
PAGE 38 // WESTFIELD CORPORATION PROPOSAL —— If you were a Westfield Shareholder at the 3.8 Effect of the Demerger Demerger Record Date, Westfield will apply your Distribution Entitlement as consideration (a) Fundamental Demerger Principle for the transfer of OneMarket Shares under Under the Demerger Deed, to give effect to the Demerger the Demerger Scheme either to you (if you the parties intend that, as a fundamental Demerger Principle: are an Eligible Westfield Shareholder) or to the (i) the OneMarket Group will have: Sale Agent on your behalf (if you are a Selling —— the entire economic benefit and risk and liabilities Shareholder); and of the OneMarket business as if the OneMarket —— Westfield Corporation will transfer either to Group had owned and operated the OneMarket you or to the Sale Agent (if you are a Selling business at all times; and Shareholder) one OneMarket Share for every 20 —— none of the economic benefit or risk or liabilities Westfield Shares you held as at the Demerger of Westfield; and Record Date, in accordance with the Demerger Scheme. (ii) Westfield will have: —— OneMarket will cease to be part of Westfield —— the entire economic benefit and risk and liabilities Corporation. of the Westfield business as if Westfield had owned and operated the Westfield business at (c) ASX Listing of OneMarket Limited all times; and OneMarket Limited has applied to the ASX for admission —— none of the economic benefit or risk or liabilities to the Official List and for Official Quotation of all OneMarket of the OneMarket Group business. Shares on the ASX. The Demerger is conditional on the Notwithstanding the fundamental Demerger Principle, ASX approving the admission of OneMarket Limited to the Demerger Deed provides that the OneMarket Group will Official List and granting permission for Official Quotation remain liable for all liabilities and claims arising from, or of OneMarket Shares, subject to any conditions that ASX in connection with the Restructure, the Demerger, the may reasonably require and which may be acceptable to OneMarket business and the OneMarket Group entities the Westfield Board. and claims from third parties in connection with the If the Demerger becomes Effective, OneMarket Shares Westfield assets which have been developed, processed or will trade under the code “OMN” and are currently expected accessed by the OneMarket Group excluding: (a) any third to commence trading on a deferred settlement basis on party intellectual property; and (b) Westfield’s subsequent or about 31 May 2018 and on a normal settlement basis modifications of the relevant asset which has occurred on or about 11 June 2018. independently of the OneMarket Group. If you are an Eligible Westfield Shareholder, it is your The Demerger Principle is subject to anything to the contrary responsibility to determine your entitlement to OneMarket set out in any other Demerger Transaction Document. Shares before trading those OneMarket Shares, to avoid the risk of selling OneMarket Shares that you do not or will (b) Creditors not own. If you sell OneMarket Shares without receiving In the opinion of the Westfield Directors, the Demerger confirmation of your entitlement, you do so at your own risk. will not, if implemented, materially prejudice Westfield If you are an Eligible Westfield Shareholder, holding Corporation’s ability to pay its creditors. statements for OneMarket Shares are currently expected to be dispatched to you by 7 June 2018. A holding statement will be sent to you by pre-paid post to your address on the Westfield Register.
WESTFIELD CORPORATION PROPOSAL // PAGE 39 SECTION 3 DETAILS OF THE DEMERGER
3.9 Demerger Transaction Documents (ii) Obligations of OneMarket Limited (a) Demerger Implementation Deed OneMarket Limited agrees to take all steps reasonably required to give effect to the Demerger, including: On 6 April 2018 Westfield and OneMarket Limited entered into a Demerger Implementation Deed which sets out —— Executing the application for the ASX Listing of the steps required to be taken by each of Westfield and OneMarket Limited within 7 days after the date of the OneMarket Limited to effect the Restructure, Demerger Demerger Booklet and causing each member of the Scheme, Demerger Dividend and the Capital Reduction and OneMarket Board to sign the listing memorandum and other steps necessary to give effect to the Demerger on the lodge it with ASX Demerger Implementation Date. —— Until the Demerger Implementation Date, using The key terms of the Demerger Implementation Deed are reasonable endeavours to satisfy any ASX as follows: requirements in relation to the ASX Listing of OneMarket Limited, to ensure that ASX approves the (i) Obligations of Westfield ASX Listing of OneMarket Limited, and to ensure that Westfield agrees to take all steps reasonably required to give trading in OneMarket Shares commences on ASX on effect to the Demerger, including: the Demerger Implementation Date —— Convening the Demerger Scheme Meeting in —— Ensuring that the relevant Restructure steps are accordance with the Scheme Court order of the First completed by the Demerger Implementation Date Court Hearing and convening the General Meeting to —— If the Demerger Scheme becomes Effective, on the be held on the same day as the Demerger Scheme Demerger Implementation Date, registering or causing Meeting to be registered Westfield Shareholders as holders of —— Preparing an application for the ASX Listing of OneMarket Shares (and the Sale Agent as the holder of OneMarket Limited within 7 days after the date of the OneMarket Shares in respect of Selling Shareholders). Demerger Booklet and a listing memorandum for use (iii) Other provisions by OneMarket Limited in connection with its application for ASX Listing The Demerger Implementation Deed also contains: —— Until the Demerger Implementation Date, using its —— obligations on Westfield and OneMarket Limited to best endeavours to ensure the satisfaction of any ASX each procure that the Sale Agent effects the sale of the requirements in relation to the listing of OneMarket OneMarket Shares referrable to Selling Shareholders Limited, that ASX approves the ASX Listing of and pays the proceeds of that sale in accordance with OneMarket Limited, and that trading in OneMarket the terms of the Sale Facility; and Shares commences on ASX on the Demerger —— obligations on OneMarket Limited to forward to Implementation Date Eligible Westfield Shareholders (or the Sale Agent in —— If the Capital Reduction is approved and the Demerger respect of Selling Shareholders) holding statements for Scheme Resolution is passed and all other Conditions OneMarket Shares to which they are entitled. Precedent are satisfied or waived, applying to the The Demerger Implementation Deed terminates if the Scheme Court for approval of the Demerger Scheme, Demerger Scheme has not become Effective on or before and (if the Demerger Scheme is approved) lodging the 30 September 2018. Scheme Court order with ASIC (b) Demerger Deed —— Ensuring that any outstanding Restructure steps are On 6 April 2018 Westfield and OneMarket Limited entered completed by the Demerger Implementation Date into a Demerger Deed to facilitate the orderly separation —— If the Demerger Scheme becomes Effective: of OneMarket from Westfield in accordance with the —— Resolving to pay the Demerger Dividend and effect the fundamental Demerger Principle. The Demerger Deed Capital Reduction (if any); and records the economic and legal effect of the Demerger. —— On the Demerger Implementation Date, undertaking The key terms of the Demerger Deed are as follows: the Capital Reduction and Demerger Dividend and (i) Demerger Principle doing everything necessary to effect the transfer of The underlying principle of the Demerger is that, following OneMarket Shares to Eligible Westfield Shareholders its implementation, the position as between OneMarket and (or the Sale Agent in respect of Selling Shareholders) Westfield will be as described in section 3.8(a).
PAGE 40 // WESTFIELD CORPORATION PROPOSAL (ii) Indemnity 3.10 Taxation implications OneMarket Group indemnifies Westfield for all liabilities and A general guide to the taxation implications of the Demerger claims arising from, or in connection with to the Restructure, for Westfield Shareholders is set out in section 7 of this the Demerger, OneMarket, the OneMarket Group entities Demerger Booklet. This guide is expressed in general terms and claims from third parties in connection with Westfield and is not intended to provide taxation advice in respect of assets which have been developed, processed or the particular circumstances of any Westfield Shareholder. accessed by the OneMarket Group excluding (a) any third party intellectual property and (b) Westfield’s subsequent 3.11 Other alternatives considered modifications of the relevant asset which has occurred The Westfield Board considered a range of alternatives to independently of the OneMarket Group. the Demerger, including a sale of the OneMarket business, OneMarket indemnifies Westfield against liabilities incurred the closure of the OneMarket business, a demerger of by Westfield or a Westfield beneficiary arising from or in the OneMarket business to an unlisted entity, delaying connection with any failure of the Demerger Booklet, listing the separation of OneMarket from the combined Unibail- memorandum or marketing material published in connection Rodamco/Westfield group and the demerger of the with the Demerger to comply with any applicable legal OneMarket business to an entity listed on a stock exchange requirements (including the ASX Listing Rules). other than ASX (including a United States exchange). The Westfield Board determined that an ASX Listing (iii) Litigation of OneMarket Limited provides Westfield Shareholders The Demerger Deed sets out a procedure for the with the best opportunity to realise additional value to management of claims and costs which arise after the the Unibail-Rodamco Scheme Consideration and is the Demerger Implementation Date where the subject matter of best structure to achieve a separation of the OneMarket the claim relates to the Demerger, Restructure, OneMarket business at the same time as the implementation of the business, OneMarket Limited, a OneMarket Group company, Unibail-Rodamco Schemes. Westfield’s Board believes the Westfield group, Westfield business or Westfield assets. that ultimately OneMarket will be better positioned as an (iv) Employees independent company given its technology focus, financial profile and ability to develop its products as a standalone OneMarket Limited assumes responsibility for, and industry network indemnifies the Westfield Group in respect of all claims, liability or loss incurred by the Westfield Group which arises out of any aspect of the employment of any OneMarket employee. (v) Tax claims Consistent with the Demerger Principle, if Westfield receives a claim in relation to tax referable to the business of OneMarket (whether before or after the Demerger Implementation Date) or the Restructure, then OneMarket Limited agrees to pay to Westfield (by way of indemnity) an amount based on the tax payable. If OneMarket Limited receives a claim in relation to a tax liability that is deemed to be a group liability of the Westfield income tax consolidated group (whether before or after the Demerger Implementation Date), then Westfield agrees to pay to OneMarket Limited an amount based on the tax payable. (c) Demerger Deed Poll On 6 April 2018 OneMarket Limited entered into the Demerger Deed Poll in favour of Westfield Shareholders under which OneMarket Limited has undertaken to take the steps to be performed by it under the Demerger Scheme, including applying for admission to the Official List of ASX and for Official Quotation of OneMarket Shares on ASX. The Demerger Deed Poll is set out in full in Annexure F.
WESTFIELD CORPORATION PROPOSAL // PAGE 41 SECTION 4 INFORMATION ON ONEMARKET
This section contains information about OneMarket, its business model and products 4.1 Overview of OneMarket —— Increase access to innovation to drive customer OneMarket is developing a retail technology network that engagement: through providing network participants seeks to help bricks-and-mortar retailers compete more with access to products that seek to leverage new effectively in the evolving retail environment. OneMarket and innovative technologies (including artificial plans to do this by using its proposed network to develop intelligence/machine learning, natural language product solutions which bring together retailers, shopping processing and augmented reality) to create engaging venues, brands and technology companies (individually and consumer experiences. By utilising the network to collectively known as network participants). The objective create improved experiences for consumers, network of the OneMarket network is to rapidly implement new participants can increase loyalty and engagement from technologies at scale, to facilitate collaboration in the retail their consumers. industry and to leverage a comprehensive set of consumer —— Enhance access to technology in a cost effective data to provide network participants with insights and manner: through providing network participants intelligence regarding their consumers and the products with access to the latest technology, thus reducing consumers browse and buy. the requirement for network participants to develop These solutions are designed so that all network participants this capability in-house. OneMarket aims to provide benefit as each new participant joins. OneMarket believes network participants with the latest technology and that by operating as a network rather than acting as to make that technology more readily accessible and individual or siloed entities, network participants can better available more cost effectively. harness the power of their collective knowledge and scale —— Bridge the data gap: through applying machine and achieve results no single participant could obtain alone. learning and other techniques to give network Accordingly, OneMarket’s core business proposition is to participants a more comprehensive understanding become the trusted independent entity for establishing this of their consumers and the products consumers common network. browse and buy. A single network participant can Participation in the OneMarket network is intended to only gather information directly on the products it sells enable bricks-and-mortar retailers to augment their physical or the consumers it interacts with. By unlocking the retail advantages to compete more effectively in the face power of a more holistic understanding of consumers, of industry-wide disruption driven by advances in digital OneMarket seeks to generate insights into consumer technologies, shifting consumer mindsets and emerging needs and behaviour with the objective of improving non-traditional retail models. Through OneMarket, network consumer engagement and ultimately increasing participants should be better positioned to address three sales conversions. key issues facing the retail industry today: technology In order to execute on its vision, OneMarket has been inefficiencies, issues of cost and access to the latest investing in its technology platform. This is the underlying technology and data deficiencies. OneMarket aims to offer infrastructure which provides a common set of capabilities opportunities for network participants to: and enabling technologies that can be accessed by network participants via OneMarket’s products. Key capabilities of the platform being developed include consumer identification, communications channel with consumers, location data and logic capabilities. The intent is that this platform will drive OneMarket’s ability to develop, deploy and scale new networked products going forward. OneMarket is headquartered in San Francisco with its European operations based in London.
PAGE 42 // WESTFIELD CORPORATION PROPOSAL 4.2 OneMarket history 4.3 Industry overview OneMarket’s business strategy has evolved from the The retail industry is traditionally made up of various players: learnings of Westfield Labs and a number of OneMarket’s —— Brands: Produce products and are focused on brand products employ advanced versions of technology development and advertising to sell through retailers originally developed by Westfield Labs. Westfield Labs was or their own retail concept stores established in October 2012 by Westfield to understand key —— Retailers: Provide a shopping environment for concerns and challenges that shoppers experience within consumers to purchase products and focus on Westfield shopping venues and to use digital technology consumer marketing to address those issues. Westfield Labs conducted assessments of shopper journeys within Westfield shopping —— Shopping venues: Aggregate retailers and provide venues and built a series of digital products and services a venue for consumers to shop to address specific issues that were identified through that —— Consumers: Interact with retailers and shopping process. All of the offerings developed by Westfield Labs venues to purchase products were tailored for Westfield properties and shoppers. On an aggregate sales basis, bricks-and-mortar retailers While Westfield Labs was successful in driving innovation operating primarily physical stores still dominate the retail within Westfield shopping venues, Westfield realised that market: 89% of consumer retail purchases in the US still innovating within Westfield shopping venues was not enough occur in physical stores. Nevertheless, the bricks-and- to create an impact on the overall retail industry. Westfield mortar retail model has experienced a level of disruption in formed the view that to increase consumer engagement recent times driven predominantly by changing consumer and sales, bricks-and-mortar retailers needed to operate preferences and expectations. Specifically, while physical together as a network. Westfield board member Don retail still dominates the industry, most of the retail sales (as Kingsborough was appointed President of Westfield’s digital much as 60%–70% for some major retailers) are influenced and data business in July 2016 and was tasked with defining by digital touchpoints, such as online browsing and product a new strategy for that business. reviews. The proliferation of digital devices and smart In January 2017, Westfield Retail Solutions was established phones has provided consumers with access to information with a view to create a broad network of retailers, shopping and a choice of products sourced from anywhere in the venues, brands and technology companies spanning well world. Consumers can use digital channels and social media beyond Westfield’s properties. Since then, the goal of to connect with retailers and brands when and where they this network has been to help bricks-and-mortar retailers want to. In OneMarket’s view, consumers expect increasing compete successfully with non-traditional players by creating engagement with retailers and brands and there is a a more seamless shopping experience for consumers, growing expectation that previous interactions with retailers leveraging new and emerging technologies and consumer and brands will be used to enhance their future shopping interfaces, and applying machine learning and data science experiences. OneMarket also believes that the combination to better understand consumers. of the large number of available information sources, consumer interfaces and commerce channels has created a Westfield Retail Solutions formed the view that to succeed, more fragmented consumer shopping journey and reduced it needed to become a trusted independent entity for retailers retailers’ ability to effectively engage with consumers and and shopping venues generally rather than being closely tied meet their needs in the manner that they now expect. to Westfield. In November 2017, Westfield Retail Solutions rebranded to OneMarket – a brand name that embodies In response to changing consumer needs and behaviours, the company’s vision to create a common and trusted new digital retailing models have emerged over the last retail network. The next step that was envisioned was to several years including rental services like Rent the Runway, separate OneMarket from its parent, Westfield, with a view subscription services like Stitch Fix, and marketplaces like towards accelerating execution of OneMarket’s strategy. The Alibaba and Amazon. These entities have created new combination discussions with Unibail-Rodamco provided products and services that provide an alternative option an opportunity to do this, and, in January 2018, OneMarket for consumers as to where and how they shop. A key began operating independently of Westfield. competitive strength of these non-traditional retailers is that they leverage platform business models. For example, in the In preparation for the separation of OneMarket from past decade or so, some of the most successful business Westfield, services previously provided by OneMarket to models in the technology industry have centered around Westfield, including the hosting, support and maintenance developing a platform on which a network of participants of internal application program interfaces, Westfield’s map could come together to share connections (to consumers, platform and digital directory platform have been migrated suppliers and service providers) as well as innovations in to Westfield. Equity investments in Deliv, Inc. (a provider of technology. For example, Amazon, JD.com, and Alibaba crowd-sourced, same-day delivery services), Dreamscape have built successful platforms of this kind. OneMarket Immersive, Inc. (a provider of virtual reality entertainment believes bricks-and-mortar retailers have an opportunity to experiences) and Melian Labs, Inc. (the owner of the adopt and adapt similar business models to enhance their MyTime website and mobile app which offers a way to book value proposition to consumers. appointments with local businesses in the United States online) will be retained by the combined Unibail-Rodamco/ Westfield group following the Demerger.
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As a result of frequent digital interactions with consumers, and avoid redundant spend. OneMarket believes that many non-traditional retailers have collected a significant this approach not only reduces each individual retailer’s amount of consumer data that provides valuable insights investment needs, but also minimises investment risks into consumer needs and preferences. For instance, 85% of associated with innovation uncertainty. Amazon Prime members visit Amazon.com on average once —— Strategic relationships: OneMarket’s aggregated a week (or 52 times a year). At the same time, many bricks- network seeks to develop technology partnerships and-mortar retailers in the United States may see shoppers of greater scale and scope than a single retailer or significantly less often, and these visits are often anonymous. shopping venue operator could on its own. OneMarket Interaction frequency yields data and the opportunity to intends to establish strategic relationships with better understand consumers. That understanding can technology companies to further leverage technology lead to better products, services, and experiences. As a investments and build better products for OneMarket’s result, non-traditional retailers have been capitalising on the clients (retailers, brands and shopping venues), understanding they have derived about consumers and have shoppers, and other network participants. OneMarket used that to achieve strong market share growth. proposes to act as a conduit between the various OneMarket understands that many bricks-and-mortar network participants to enable collaboration. retailers recognise the need to better understand consumers —— Networked data: Single retailers can only gather and to innovate rapidly to bridge the growing data and information on a limited number of consumer technology gap. However, bricks-and-mortar retailers have interactions, while networked data enables a broader struggled to innovate at the same rate or scale as their view of shoppers’ needs and behaviour. This improved non-traditional competitors. Collectively, though, bricks- understanding may be used to generate more informed and-mortar retailers and shopping venues continue to see insights about consumer needs and behaviour and more consumers and retail spend than any non-traditional ultimately create more relevant, personalised, and retailer. As a result, OneMarket’s strategy is to provide a enjoyable shopping experiences for the consumer. retail technology network where bricks-and-mortar retailers OneMarket believes it is particularly well positioned to execute have an opportunity to harness the power of their collective on this strategy due to three key competitive advantages: knowledge and scale to compete more effectively in the —— Retailer relationships and trust: Due to OneMarket’s retail industry. evolution out of a shopping venue operating company 4.4 Strategy and business model (Westfield), OneMarket has strong and non-competitive relationships with some of the largest and most (a) OneMarket strategy influential retailers around the world. OneMarket’s OneMarket believes that bricks-and-mortar retailers, brands access to the top retailers globally and the non- and shopping venues will benefit from having access to a competitive nature of its business model allow the network to better compete and win consumer attention company to play a unique role of aggregating and across all touchpoints (whether offline, online or the facilitating a network across the retail industry. intersection of the two) in the rapidly evolving retail market. —— Industry expertise: OneMarket’s management OneMarket’s strategy is to create a global retailer, brand, team has a good understanding of both the retail shopping venue and technology company network that industry and network business models. A number of shares technology, strategic relationships and data-driven members of the management team have considerable consumer insights to improve the businesses of its network experience in operating network companies prior to participants. There are three key complementary investment joining OneMarket. Additionally, OneMarket’s evolution components that are driving OneMarket’s strategy: out of a shopping center operating company allows Networked technology: A common retail network can OneMarket the opportunity to leverage its knowledge help individual retailers to leverage each other’s information of traditional retailing models. technology investments and learnings, and thus reduce —— In-house innovation capabilities: OneMarket has costs. Amazon alone spends more on innovation than attracted and developed in-house technology and every bricks-and-mortar retailer individually and many such data science talent and capabilities to build and retailers combined. Given retailers’ limited information execute OneMarket’s network technology platform technology budgets and pressing business priorities, and products. OneMarket has also made acquisitions OneMarket believes it is nearly impossible for each of them of existing businesses to further augment its in-house to individually invest in innovation at the same level. At the subject matter expertise. same time, retailers cannot ignore the pressure to innovate to keep up with changing consumer needs, mindsets and (b) Network business model expectations. For bricks-and-mortar retailers, being a part OneMarket’s client proposition is to create a network that of the network means that they do not need to each invest provides both immediate and long-term value to its network in many of the same technologies individually but instead participants. can leverage the network to enhance their business where To join the OneMarket network, clients are asked to enter the relevant capability is available as part of the network into a Network Participation Agreement (NPA). The NPA is
PAGE 44 // WESTFIELD CORPORATION PROPOSAL a multi-year master services agreement. Clients sign up for platform capabilities. OneMarket believes other revenue access to OneMarket products by signing separate addenda generation opportunities may emerge over time. setting out the specific terms and conditions applicable to the OneMarket products that the client wishes to access, (c) Digital media and advertising such as Live Receipts, Intelligent Parking Technology and In addition to OneMarket’s strategy to develop the Shopper Intelligence. OneMarket products are discussed OneMarket network, OneMarket concurrently generates in section 4.6. Under the NPA, clients agree to provide revenue from its complementary digital media and OneMarket with certain customer data and provide advertising business. OneMarket with a royalty-free licence to use such data. OneMarket’s Shopper Exchange product currently OneMarket proposes to use the data provided by clients charges advertisers to deploy and manage targeted digital under NPAs to derive shopper insights and to develop and advertising campaigns using retailers’ data. The OneMarket enhance network products, which each network participant Shopper Exchange fee is currently charged per campaign can use to improve its business. and distributed between OneMarket and the participating retailer under the relevant revenue sharing arrangements. OneMarket has entered into a network participation agreement with Unibail-Rodamco/Westfield (through 4.5 Key Competitors Westfield Property Management, LLC and Westfield Europe OneMarket’s key competitors differ at the company level and Limited) under which, subject to certain conditions being the product level. While some solutions to address retailer satisfied, Westfield has signed up for OneMarket’s Shopper challenges exist today, they typically fall into one of two Exchange product and elements of OneMarket’s Shopper categories: Intelligence and Shopper Profile products for certain Westfield venues based on Westfield’s needs, including —— solutions that solve a single retailer issue; and Westfield’s flagship properties in the United States and the —— connected commerce platforms that have retailers plug United Kingdom. In addition, Unibail-Rodamco/Westfield into infrastructure. (through Westfield Property Management, LLC and Westfield While retailers have adopted single solutions to aid digital Europe Limited) and OneMarket have entered into a term transformation of their business, these offerings have often sheet under which they agree to negotiate in good faith failed to produce significant impact because single solutions an agreement for Westfield to sign up for OneMarket’s do not address the core issues that challenge retailers – the Intelligent Parking Technology product by 15 April 2018. rapid evolution of digital technology and shifts in shopper In addition, OneMarket has entered into two other NPAs, mindsets and behaviours. including an NPA with Nordstrom, Inc. under which In the past few years, several retail technology players have Nordstrom, Inc. has signed up for OneMarket’s Shopper commenced focusing on building connected commerce Exchange and Live Receipts products. platforms powered by data, artificial intelligence and The other two NPAs are on terms broadly similar to the machine learning. Companies like IBM and Salesforce are NPA with Westfield and it is intended that NPAs signed using artificial intelligence to help retailers gather consumer with additional clients will be on similar terms. A summary insights, personalise services, and manage operations. of the key terms of the NPA with Westfield is set out in INFOR (a cloud-based enterprise software company) is section 8.7(c). expanding its technology platform capabilities even further OneMarket is in active discussions with a variety of other by helping retailers with their merchandising and supply retailers, shopping venues and brands to have them join chain management. the OneMarket network. OneMarket believes that it is the only company seeking OneMarket intends to generate revenue from the network to create a common cross-retailer data and technology through a combination of the following: network that brings retailers, shopping venues, brands and technology companies together in an integrated way. —— Software-as-a-Service (SaaS) fees for access to different OneMarket technology and data products In addition, OneMarket management believes that there are significant barriers to entry to establishing a similar business. —— Subscription fees for access to OneMarket’s network These include the substantial investment and human capital —— Non-recurring fees (e.g. setup fees and professional required to establish the network technology and the strong service fees associated with selected OneMarket relationships with retailers and shopping venues which were products) established as a result of OneMarket’s Westfield connection. —— Transaction fees (e.g. order tracking feature enabled 4.6 Development of the platform and products to track a location / progress of shoppers’ online and Buy-Online-Pick-up-In-Store (BOPIS) orders OneMarket has expended considerable resources in where applicable) designing and developing the technology platform over the last 16 months and fully transitioning from its prior In the future, OneMarket may generate additional fees from Westfield Labs business model. The costs incurred in technology companies that pay for access to OneMarket’s doing are included in the Historical Financial Information in network and from third-party developers that pay platform section 5. That development program on the platform has access and royalty fees to build and deploy additional now reached the point where OneMarket is in a position to solutions that leverage OneMarket’s network and technology launch its initial products leveraging the platform capabilities
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and to increase the number of participants in the network. —— Logic capabilities: proprietary data algorithms enable That commercial expansion, along with the development of OneMarket products to provide predictive consumer additional products and network capability will be the focus insights to network participants, with a view to allowing of OneMarket’s activities in 2018. them to offer optimal offers to consumers at the OneMarket’s external product offering to network right time. participants is generally intended to be focused on (a) OneMarket believes that it is making good progress in products where the value to clients is derived from software developing the technologies that underpin the above and related services; and (b) products that utilise networked capabilities. Development of the OneMarket platform in data to deliver consumer insights and intelligence. Certain this manner is expected to be ongoing over the medium products are intended to be targeted primarily at retailers term and the capabilities underpinning the OneMarket and others at shopping venues – and in some cases, both. platform can be expected to be enhanced and added Furthermore, certain products may have secondary target to as technology advances, products are released and client types, such as brands and technology companies. commercial experience is obtained. Some of the features that are developed as part of the An outline of OneMarket’s product development, platform or the products offered to network participants expected timing of release and future product pipeline may be attractive to potential clients outside the retail is described below. sector. OneMarket may seek to monetise those products outside the retail sector, although those opportunities (b) Live Receipts product are not intended to be the primary focus of OneMarket’s Live Receipts is an interactive digital receipt that allows business strategy. retailers and/or shopping venues to engage shoppers after a transaction (online and in-store). Live Receipts (a) Development of the platform enables real-time, two-way engagement between the There are a number of current initiatives being pursued in the retailer and consumer, particularly post-purchase including development of the OneMarket retail technology platform. features like order tracking updates. Digital receipts can A key overarching objective of the development of the currently be delivered through email, SMS and Facebook platform is to provide network participants in the network Messenger, with the objective of delivery through additional with common functionality so that network participants have communication channels going forward. The Live Receipts access to products that are suited to the particular needs of product creates a medium through which OneMarket can each network participant. help retailers establish a personalised dialogue with the shopper by leveraging the consumer identification, logic and The capabilities of the OneMarket platform that are actively communication capabilities of the OneMarket technology being pursued and developed include the following: platform. As additional retailers and shopping venues join —— Consumer identification: compiles common identities the network and utilise Live Receipts, consumers benefit in a comprehensive data base of consumers containing by having their transactions available in one place. As useful information on consumers for network additional consumers sign up for Live Receipts, the product participants with the ability to connect consumer becomes more valuable to retailers and shopping venues identities across various touch points. OneMarket is as it enhances the effectiveness of their communication actively pursuing a variety of initiatives to encourage with shoppers. as broad a range of consumers as possible to interact The development of the first version of Live Receipts with the OneMarket network in a manner that helps to has been completed, is in testing and was launched in protect the privacy of individual consumers. March 2018. —— : a variety of Communications with consumers In the future, Live Receipts is proposed to have the ability mechanisms whereby network participants and to seamlessly interact with the shopper and maintain context consumers can interact with each other through across communication devices, including interacting on multiple communication channels and seamlessly voice-enabled devices through the implementation of a move between channels whilst continuing the network digital assistant. interaction in a way that enriches the experience of consumers. Those channels include various Live Receipts can provide the following benefits to retailers established mechanisms of digital communication and and/or shopping venues: messaging but more importantly the much anticipated —— Improves marketing return on investment by proliferation of communication through voice-enabled establishing communication channels with consumers devices. that can eventually be used to send follow-on —— Location data: functionality and capability to collect marketing accurate indoor location data in shopping venues and —— Increases number of digital touchpoints for retailers retailers. This provides a unique opportunity to acquire to communicate with consumers post-purchase, rich data which can be used to enhance services leveraging the actionable consumer data from the offered by network participants to consumers and the network experience of retailing enjoyed by consumers. —— Reduces customer service support requests regarding e-commerce order tracking
PAGE 46 // WESTFIELD CORPORATION PROPOSAL —— Reduces cost of printing paper receipts service using licence plate recognition as the sole parking —— Enhances retailer brand image by giving consumers credential. Following the Demerger, OneMarket will continue confidence in retailer’s investment in consumer-friendly to own the intellectual property for the pilot version of the and environmentally-friendly options Intelligent Parking Technology product but has granted Westfield a perpetual royalty free license to use and upgrade Live Receipts can provide the following benefits to the pilot product. consumers: The improved OneMarket Intelligent Parking Technology —— Increases ease of engagement with retailers post- version which is slated for public release in mid-2018 is a purchase (for example e-commerce order tracking and multi-tenant service which is integrated with Live Receipts customer service support) and other customer interactions on the network and which —— Increases consumer communication channel options uses both licence plate recognition and bar code scanning to interact with retailers as parking credentials. —— Reduces clutter or lost paper receipts Intelligent Parking Technology can provide the following —— Increases consumer options for receiving and storing benefits to shopping venues and retailers with controlled purchase receipts parking infrastructure: (c) Intelligent Parking Technology product —— Encourages visits (and increases parking revenue) by removing difficulties from the first and last touchpoints OneMarket’s Intelligent Parking Technology consists experienced by visitors who drive of software and related services (for example payment processing) that enable shopping venues - whether —— Provides a platform for delivering additional value- shopping malls, airports, or retail stores with controlled added services (such as automatic parking validation) parking - to upgrade their existing parking offering to reduce to highly valued consumers the difficulties consumers face when entering and exiting —— Enables insights into the patterns between member the controlled parking. Intelligent Parking Technology is parking and visit/purchase behaviour within the proposed to work in concert with Live Receipts to deliver corresponding shopping venue or adjacent retail digital parking receipts and other value-added features (for locations example automatic parking validation) to those consumers —— Provides consumer information that will allow shopping who opt in to the service. Additionally, Intelligent Parking venues to enrich the consumer experience Technology is envisioned to leverage components of Intelligent Parking Technology can provide the following consumer identification, communication, location data benefits to consumers: and logic capabilities of the OneMarket platform. The product is important in understanding shopper journeys —— Facilitates a more enjoyable shopping experience by and connecting retailers and venues with consumers as reducing difficulties commonly encountered in visits to they arrive into the parking structure but before they enter shopping venues where driving is the primary mode of the retail establishment. As additional parking locations transportation are added to the Intelligent Parking Technology network, —— Facilitates the provision of loyalty benefits to VIP visitors consumers who have already registered for Intelligent by providing a way for shopping venues and retailers Parking Technology can access the additional parking to track parking usage correlated with consumer locations without having to go through a full setup each time. purchases made from network participants Consumers first register for Intelligent Parking Technology (d) Shopper Exchange product by creating an account and entering payment (credit The Shopper Exchange is a digital advertising marketplace card) information as well as licence plate information (if that enables brands and retailers (specifically multi-brand applicable). From then on, consumers can more quickly retailers, such as department stores) to better engage with enter a controlled parking area in the OneMarket Intelligent consumers and drive incremental sales by allowing brands Parking Technology network by virtue of either licence plate to access and target consumers against retailers’ data when recognition or scanning a bar code on their mobile phone. In buying online media – all in a way designed to protect the addition, they do not need to take time to pay before exiting: integrity and proprietary nature of that data. the automobile is recognised (again by virtue of either licence plate recognition or bar code) and the applicable payment is The Shopper Exchange became a OneMarket product in charged to the credit card on file. The receipt for the parking February 2017 upon the acquisition of 12 Digit Marketing, transaction is proposed to be delivered to the consumer and was rebranded as the OneMarket Shopper Exchange via a Live Receipt, highlighting the synergies between the in November 2017. Shopper Exchange enables the two products. collaboration between retailers and brands to improve the effectiveness of digital advertising campaigns intended to The pilot version of intelligent parking (first developed drive online or in-store sales. by Westfield Labs) was deployed in Westfield London in November 2016, followed by launches in Westfield Stratford Brands, as the primary advertiser clients of the Shopper City and Westfield Century City in August 2017, and all three Exchange, pay to place digital ads through the Shopper are active today. The pilot version of intelligent parking was Exchange platform, which is able to deliver ads in all major developed exclusively for Westfield and is a single-tenant formats (display, mobile, video and social) across the entire
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web. Brands select targeting parameters at the product The Shopper Intelligence product is envisioned to also department, category and sub-category level based on leverage certain aspects of data collected via OneMarket’s the relevant retailer’s first-party online and offline data – and other products such as Live Receipt and Intelligent Parking in some cases, additional parameters such as historical Technology. Additionally, OneMarket’s Shopper Exchange purchases, frequency, recency, geography and daypart. product could be leveraged by clients as a means to The retailer data also allows for “closed loop” measurement execute the performance improvement actions highlighted of whether an ad purchased through the Shopper Exchange by the Shopper Intelligence product. For example, resulted in a sale. shopper insights can help fine-tune audience targets for an By using the Shopper Exchange for their online media advertising campaign executed via the OneMarket Shopper buying, brands are able to engage with the exact consumers Exchange. OneMarket believes that the utility of such data who are buying and/or browsing at the retailers where in each of these applications will be enhanced by virtue of their products are sold. Furthermore, transparency into being networked. in-store and online sales, brand engagement and creative The first version of Shopper Intelligence for shopping venues performance allows brand advertisers to optimise their is slated for public release in the first half of 2018. advertising campaigns and ultimately maximise their return Shopper Intelligence can provide the following benefits to on advertising spend. retailers and/or shopping venues: For retailers, the primary benefit of participating in the —— Improved understanding of shopper demographics, Shopper Exchange (by providing their brand partners access unique store visits, and consumer purchase behaviour to data) is to drive incremental sales to their own stores; through distilled and easy-to-understand insights retailers also obtain valuable information tying specific brand —— Factual context to identify next steps that the retailer campaigns to corresponding sales detail. Furthermore, as a and/or the shopping venue can action to improve its data contributor, a retailer receives direct monetary benefit commercial operations, such as identifying specific through OneMarket’s revenue share arrangement when that shopper segments to target for the follow-on email retailer’s data is used for targeting and measurement. marketing or paid digital advertising Lastly, acting as an advertiser, retailers can effectively spend —— Over time, measurement of the impact of various co-op marketing dollars on behalf of a brand using the operational changes recommended by or acted upon Shopper Exchange. Retailer concerns over data sharing by OneMarket via other data products are alleviated because the Shopper Exchange gives them complete control over their data: retailers control access and —— Over time, provides measurement and benchmark usage rules. performance insights across retailer and venue peer sets. Shopping venues will also have the opportunity to participate in the Shopper Exchange as a data contributor and/or as By way of example only, use of the Shopper Intelligence an advertiser. product may enable retailers and/or venue marketing teams to identify opportunity segments such as 18 to 34 year age (e) Shopper Intelligence product female shoppers (in aggregate) that belong to high income Shopper Intelligence is a data product that OneMarket households. Additionally, retailers and/or venues can track proposes to use to leverage its proprietary data science this high value segment’s engagement with the retailer or capabilities to analyse retailer and/or venue data to venue across a period of time. reveal insights and to recommend potential performance improvement actions such as identifying high-value shopper (f) Shopper Profile product segments to increase their marketing effectiveness or Shopper Profile is a data product that allows retailers and/ identifying shopper preference trends to support leasing or shopping venues to access and download individual decisions. The Shopper Intelligence product combines the shopper profiles on consumers with a unique identifier and power of retailer and/or shopping venue historical data with multiple behavioural and purchase attributes. This service OneMarket’s proprietary algorithms to extract data-driven can provide flexible access to OneMarket’s comprehensive insights around shopper segmentation analysis, consumer shopper profiles via a customer portal or, potentially in lifetime value analysis, shopping behaviour patterns and the future, API integration. OneMarket intends that a benchmarks. subscription to Shopper Intelligence will be considered a prerequisite to licensing the Shopper Profile product. Retailers and/or shopping venues would provide historical data that is available and relevant to OneMarket – such as The first version of Shopper Profile product for shopping in-venue mapping data, location data, and promotion/events venues is slated for public release in the first half of 2018. data. After applying OneMarket’s proprietary algorithms, The Shopper Profile product can provide the following OneMarket would provide access to a near real-time and benefits to retailers and/or shopping venues: interactive dashboard tool where network participants can —— Enhanced existing shopper profiles with more access overall insights and shopper segment insights. In comprehensive shopper insights addition, network participants would be able to use the self-serve dashboard tool to edit data views and filters and —— An augmented retailer/venue shopper relationship download reports. management data base with new shopper profiles
PAGE 48 // WESTFIELD CORPORATION PROPOSAL By way of example only, use of the Shopper Profile product may enable retailer and/or venue marketing teams to make targeted offers to the individual shopper who is a pre-existing customer of the subscribing retailer or venue within the identified high value opportunity segment (18 to 34 year age female high income shoppers) for bespoke events and services – to create greater conversion and loyalty. (g) Future product development process OneMarket plans to continue to invest in research and development to extend the network’s product range. OneMarket’s approach will be to prioritise product development opportunities that focus on solving pressing issues across the shopper journey using cross-learned retailer data, OneMarket platform capabilities and emerging technologies (e.g., voice recognition and natural language processing). As certain product areas enter into product development, OneMarket sales and product marketing teams engage in soliciting market feedback, performing user testing and refining the product until product deployment.
Trend Opportunity Value Product Product Product Product Analysis Areas Hypotheses Ideation Development Deployment Support
OneMarket Strategy Collaboration OneMarket Product & OneMarket Data
OneMarket’s product development process is meant to create structure and flexibility, resulting in focused and iterative product development. 4.7 Key clients OneMarket is in active discussions (at various stages from lead qualification to value proposition to contract negotiation) with a variety of retailers, shopping venues, and brands to have them become paying clients of OneMarket. (a) Retailers OneMarket is in active discussions with leading retailers in the United States and United Kingdom including department stores, mass merchandisers and specialty retailers to become participants in the OneMarket network and to purchase one or more retailer-focused products, such as Live Receipts and Shopper Intelligence. Nordstrom has signed up for OneMarket’s Shopper Exchange and Live Receipts products. In addition to the retailers that have joined the OneMarket network as full network participants, OneMarket maintains revenue-generating relationships with retailers for products that were initially brought into the OneMarket product family through OneMarket’s acquisitions (as further described in section 4.14 below). For example, approximately 23 United Kingdom based retailers currently subscribe to OneMarket’s digital receipts product, which is a precursor to the fully- networked Live Receipts product. As part of its client acquisition strategy, OneMarket seeks to leverage its relationships with retailers contracted for Shopper Exchange product or digital receipts to introduce the concept of the OneMarket network with the goal of converting them into full network participants. (b) Shopping venues OneMarket has engaged with top venue operators in North America and Western Europe that have in their real estate portfolio one or more large shopping centres in those regions, as well as the operators of certain other types of venues, such as airports. To date, the shopping venue operators that have signed on as participants in the OneMarket network include Unibail-Rodamco/Westfield. (c) Brands Brand owners that do not operate their own retail stores are not currently among the primary audiences for direct participation in the OneMarket network. Nevertheless, OneMarket maintains revenue-generating relationships with certain brand owners in their capacity as advertisers directing media spend onto the Shopper Exchange product. Approximately 36 brand owning clients used the Shopper Exchange product in 2017 to advertise their products.
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4.8 Corporate structure OneMarket Limited will initially hold 90% of OM Delaware, with the remaining 10% being held by Westfield (and the Unibail- Rodamco group following the Unibail-Rodamco Transaction) through WCL Holdings Inc., a United States corporation that is a wholly owned Subsidiary of Westfield Corporation. Following implementation of the Unibail-Rodamco Transaction, Westfield Corporation will be a wholly owned Subsidiary of New Unibail-Rodamco. The initial corporate structure of the OneMarket Group after implementation of the Demerger is shown in the following diagram:
Public
nibail-Rodamco OneMarket Limited Westfield
10 0
OneMarket Holdings, Inc. (OM Delaware) ( .S.)
OneMarket Network OneMarket Network LLC Holdings Limited ( .S.) ( . .)
12 Digit Marketing FluidM OneMarket Network OneMarket Network OneMarket Network LLC LLC Limited Services Limited Europe Limited ( .S.) ( .S.) ( . .) ( . .) ( . .)
Yocuda Limited eReceipts Ltd ( . .) ( . .)
The issued share capital of OneMarket Limited is expected to comprise approximately 103.9 million OneMarket Shares following the Demerger, the exact number to be dependent on rounding. The issued share capital of OM Delaware immediately prior to the Demerger will comprise 16 million shares of common stock, held as follows: —— 14.4 million shares of common stock – OneMarket Limited —— 1.6 million shares of common stock – WCL Holdings Inc. These shareholdings in OM Delaware will be diluted pro rata by the implementation of the 2018 Equity Incentive Plan as described in section 4.12(d) of this Demerger Booklet. As noted in section 4.12(d) of this Demerger Booklet, the maximum number of shares of common stock that have been reserved for issuance under the 2018 Equity Incentive Plan is 4 million shares of common stock (20% of the issued capital of OM Delaware on a fully diluted basis). A summary of the terms of the agreements between Westfield and OneMarket Limited in relation to OM Delaware is set out in section 8.7(a).
PAGE 50 // WESTFIELD CORPORATION PROPOSAL 4.9 Future funding arrangements or other terms that could adversely affect the value of OM On 28 February 2018 OneMarket had cash and cash Delaware’s common stock and potentially the value of equivalents of approximately $185.7 million. On the OneMarket Shares. Demerger Implementation Date, OneMarket is currently Furthermore, if OM Delaware raises capital through one or expected to have cash and cash equivalents of more debt financings, the debt holders would have priority approximately $160 million. Having considered its current over the holders of common stock, including OneMarket business plan and related cash needs, OneMarket believes Limited, in a liquidation of OM Delaware. In addition, OM that its cash and cash equivalents after taking into account Delaware may be required to accept terms that restrict the cash flow outcome from operations, initial set-up costs its ability to incur additional indebtedness, as well as be for corporate functions (and including an allowance for required to take other actions that would be in the interests potential closure costs were that to occur), will be sufficient of the debt holders, including maintaining specified liquidity to meet its anticipated cash needs until late 2019. or other ratios, any of which could harm its business, results OneMarket’s future capital requirements and the timing of of operations and financial condition. those requirements will depend on many factors, including 4.10 Directors and senior management its cash generated or sourced, its growth rate, the timing and extent of the introduction of new and enhanced product From the Demerger Implementation Date the directors of and service offerings and spending to support development OneMarket Limited will be: efforts and any proposed acquisitions. —— Mr Steven M Lowy AM (Non-executive Chairman) Notwithstanding its expectation that additional funding will Steven Lowy is an executive Director of Westfield and not be required prior to late 2019, OneMarket may actively currently serves as Co-Chief Executive Officer. He seek additional funding sources or equity partners prior to holds a Bachelor of Commerce (Honours) from the that time and will engage in active and ongoing exploration University of NSW. Prior to joining Westfield in 1987, with third parties of the possibility of that type of investment Mr Lowy worked in investment banking in the US. He being made as the OneMarket business is developed. is Chairman of Football Federation Australia Limited, and a non-executive Director of Scentre Group and OneMarket may seek to raise funding from strategic the Lowy Institute for International Policy. Mr Lowy’s relationships connected to advancing its business strategy. previous appointments include President of the Board These may include funding relationships with potential and of Trustees of the Art Gallery of New South Wales, existing network participants, strategic relationships with Chairman of the Victor Chang Cardiac Research entities seeking to develop similar networks in countries Institute and Presiding Officer of the NSW Police outside the United States and special arrangements with Force Associate Degree in Policing Practice Board of network participants. Management. Prior to the establishment of Westfield in Beyond these types of funding arrangements, OneMarket 2014, Mr Lowy was the Joint Managing Director of the may seek to raise capital from other strategic investors, Westfield Group from 1997. private equity investors and/or venture capital investors —— Mr Donald D Kingsborough (Chief Executive through one or more equity or debt financings. Officer) Don Kingsborough is Chief Executive Officer It is possible that equity could be raised through OneMarket of OneMarket and is currently an executive director Limited or OM Delaware. It is currently anticipated to be of Westfield. He has been involved in the technology more likely that equity would be raised at the OM Delaware and retail sectors for the past 40 years and has helped level. This is because OneMarket expects that new establish a number of successful businesses. Mr investors are likely to be United States based or based Kingsborough has held a number of senior positions outside Australia. It can be expected that investors of this including as PayPal’s Vice President of Global Retail, kind would prefer a direct investment into the US holding Global Business and Corporate Development and as company despite the reduced liquidity associated with an President of consumer products at Atari in the late ‘70s investment in such entity compared to an investment in and early 80s. In 2001 he founded Blackhawk Network OneMarket Limited. and was CEO for a decade during which time he Capital raised through OneMarket Limited could be in the pioneered the gift card market. form of equity or debt, including equity raised through private Mr Kingsborough has a health issue that may affect his placements or through entitlement offerings to OneMarket ability to perform his duties if there was a deterioration. Shareholders. Capital raised through OM Delaware could be Mr Kingsborough has advised the Westfield Board in the form of a variety of equity or debt instruments. and the OneMarket Board that he currently considers If OM Delaware raises equity financing, OneMarket Limited that the issue does not prevent him from continuing may experience significant dilution of its ownership interest in his role. The matter is being closely monitored if it does not exercise its right to maintain its ownership as and measures are in place to provide support to him set out in the Investors’ Rights Agreement (as described in as required. section 8.7(a)). In addition, the terms of the securities issued in the equity financing could include priority in the event of an acquisition or liquidation of OM Delaware, preferential dividend rights, price-based anti-dilution rights, veto rights
WESTFIELD CORPORATION PROPOSAL // PAGE 51 SECTION 4 INFORMATION ON ONEMARKET
—— Ms Ilana R Atlas (Non-executive Director) Ilana Atlas From the Demerger Implementation Date the directors is a non-executive Director of Westfield Corporation. of OM Delaware will be: Ms Atlas was previously a partner in Mallesons Mr Steven M Lowy – see above Stephen Jaques (now King & Wood Mallesons) and Mr Donald D Kingsborough – see above held a number of managerial roles in the firm, including Managing Partner and Executive Partner, People & Mr Jeffrey Goldstein Jeffrey Goldstein is a non-executive Information. In 2000 she joined Westpac as Group Director of Westfield. He holds a Ph.D., M.Phil and M.A. in Secretary and General Counsel before being appointed Economics from Yale University, a B.A. in Economics from to the role of Group Executive, People in 2003. In Vassar College and also attended the London School of that role, she was responsible for human resources Economics. He is Chief Executive Officer of Springharbor strategy and management as well as Westpac’s Financial Group, LLC and Senior Advisor of Hellman & approach to corporate responsibility and sustainability. Friedman LLC, a private equity investment firm where he Ms Atlas is Chairman of Coca-Cola Amatil Limited and previously served as a Managing Director. Mr. Goldstein Jawun. She is a Director of Australia and New Zealand served as the Under Secretary of the Treasury for Domestic Banking Group Limited, Paul Ramsay Foundation and Finance and Counsellor to the Secretary of the Treasury in Adara Development (Australia) and is a Fellow of the the United States. He also served as the Managing Director Senate of the University of Sydney. She was previously and Chief Financial Officer of the World Bank and was Co- Chairman of Bell Shakespeare Company. Chairman of BT Wolfensohn and a partner at predecessor firms and a member of the Bankers Trust Company —— Mr Mark R Johnson AO (Non-executive Director) Management Committee. Mr. Goldstein taught Economics Mark Johnson is a non-executive Director of Westfield. at Princeton University and worked at the Brookings He holds a degree in law from the University of Institution. He currently serves on the Board of Bank of New Melbourne and a Masters of Business Administration York Mellon Corporation as well as Edelman Financial and from Harvard University. Mr Johnson is a senior advisor Vassar College. He previously served on the Boards of LPL for Gresham Partners in Sydney, advisor in Australia Financial, AlixPartners and Arch Capital. Mr. Goldstein is also to Bank of Tokyo Mitsubishi UFJ and Chairman of a member of the Council on Foreign Relations. Dateline Resources Limited and Alinta Energy. He is Chairman of the Advisory Board of the Australian Mr Jaap Tonckens Jaap Tonckens is the Chief Financial APEC Study Centre at RMIT University, Chairman of Officer of Unibail-Rodamco and a member of the Unibail- the ASIC External Advisory Panel and a Life Governor Rodamco management board. Mr Tonckens has previously of the Victor Chang Cardiac Research Institute. He served as Chief Investment Officer and as General Counsel previously held senior roles in Macquarie Bank before of Unibail-Rodamco. Prior to joining Unibail-Rodamco, retiring as Deputy Chairman in July 2007 and his Mr Tonckens served as Managing Director at Endurance former directorships include Pioneer International, AGL Capital, a private equity firm in New York. From 1994 to Energy and the Sydney Futures Exchange. 2008, Mr Tonckens worked at Morgan Stanley & Co., first in London and then in New York, where he was a managing —— Mr Brian Long (Non-executive Director) Brian Long director in the Leverage & Acquisition Finance department. is a non-executive director of The Commonwealth Prior to that, Mr Tonckens was an associate at Shearman Bank of Australia, Brambles Limited and Cantarella & Sterling in New York and Paris for more than four years. Bros Pty Ltd. He retired as a partner of Ernst & Young Mr Tonckens is a graduate of the University of Leiden in the on 30 June 2010. Until that time he was the Chairman Netherlands and of Emory University in Atlanta (USA). of both the Ernst & Young Global Advisory Council and the Oceania Area Advisory Council. He was one of the firm’s most experienced audit partners with over 30 years’ experience in serving as audit signing partner on major Australian public companies including those in the financial services, property, insurance and media sectors. He is also a Council Member of the University of New South Wales and a trustee of the Centennial Park and Moore Park Trust.
PAGE 52 // WESTFIELD CORPORATION PROPOSAL The senior managers of OneMarket are: earned a Bachelor of Science Degree in Commerce from Mr Donald D Kingsborough – see above the University of Virginia McIntire School of Commerce and his J.D. from the University of Virginia School of Law. Prior Mr Mike Blandina (Executive Vice President, Product & to attending law school, Mr. Suko served as a Naval Flight Engineering and Chief Technology Officer) Mike Blandina Officer flying aircraft carrier based attack jets in the United serves as Chief Technology Officer and Executive Vice States Navy and retired with the rank of Commander in the President of Product & Engineering. Mr Blandina has 25 Navy Reserve. years’ experience in commerce and consumer payments. He has held a number of senior positions including Vice Mr Dan Dmochowski (Executive Vice President, Retail) President of Engineering at PayPal, Director of Engineering Dan Dmochowski serves as Executive Vice President, Retail. for Google Wallet, Chief Operating Officer at TxVia, Inc Mr Dmochowski has a long history of bringing technology and Group Vice President and Chief Technology Officer at and innovation to retailers around the world. Prior to joining Blackhawk Network. Mr Blandina has previously operated OneMarket, Mr Dmochowski spent a dozen years building several businesses, including as Chief Executive Officer, Blackhawk Network from an innovation hub within Safeway providing financial and processing technology leadership to a multi-national publicly traded company with a market to companies that included American Express, First Data, cap in excess of three billion dollars. Blackhawk developed Diners Club and the IRS. In supporting American Express, the technology to display and sell gift cards in high traffic Mr Blandina was responsible for architecting and building retail outlets like grocery, drug and convenience stores. the Global Product Platform (GPP), which served as the As Senior Vice President of Global Sales and then as foundation for American Express’s prepaid business for President of International, Mr Dmochowski led Blackhawk’s almost 15 years. Mr Blandina started his career in the United expansion across the US and then to over twenty countries States Army. on six continents. Just prior to the development of the gift card business, Dan was Executive Vice President of DCI Mr Raghav Lal (Executive Vice President, Chief Data Cardmarketing which developed the first loyalty marketing & Analytics Officer) Raghav Lal serves as Executive Vice programs in the supermarket industry. Mr Dmochowski President and Chief Data & Analytics Officer. Mr. Lal has over and his colleagues at DCI developed the technology and 25 years experience in Big Data, product development, and marketing strategies that grocers continue to use today to credit & fraud risk management. Prior to joining OneMarket, create data-driven marketing and promotional programs. Mr Lal served as the Senior Vice President and Global Head Mr Dmochowski is a graduate of Cornell University and of Analytics at Visa where he established their global Data maintains contact through both board roles and guest & Analytics function and monetized payment transaction lectures. Mr Dmochowski was Chairman of the Dyson data by creating ‘Big Data’ products and offerings for School Advisory Council and has given numerous lectures banks, retailers and third parties. He has held various over the past decade to classes in both Dyson as well as the senior positions at Visa and American Express during his Johnson School of Management. career including Global Head of Small Business Product at Visa, General Manager & Vice President of Small Business Mr Antony Ritch (Executive Vice President, Venues) products at American Express, and Chief Credit Officer for Antony Ritch serves as Executive Vice President of International Small Business and Commercial portfolios Shopping Centers and Venues at OneMarket. Prior to joining at American Express. He holds an MBA in Finance from OneMarket Mr. Ritch had over 20 years of experience with Columbia University and a Bachelors of Engineering in Civil Westfield, he was most recently a member of the Senior Engineering from Delhi College of Engineering. Leadership Team where he held the position of Chief Operating Officer of Westfield Labs and prior to that was the Mr Todd Suko (Executive Vice President & General Senior Vice President Development & Regional Leader of the Counsel) Todd Suko joined OneMarket as Executive Vice Northwest, United States. During his career with Westfield, President & General Counsel in November 2017. Prior Mr. Ritch held management positions in Center Operations, to joining OneMarket, Mr Suko served as Executive Vice Leasing, Property Development, Digital Technology and President and General Counsel of Harman International Corporate roles throughout Australia, the United States Industries, Incorporated (NYSE:HAR) from 2008 to and the United Kingdom. Mr Ritch holds a Bachelor 2017 where he oversaw all legal affairs of the company, of Commerce from the University of New South Wales including corporate transactions, litigation, intellectual (Australia) and a Master of Business Administration from the property, insurance and risk management, corporate University of Cambridge (UK). governance, and regulatory compliance. Prior to joining Harman, Mr. Suko was the Vice President, General Counsel OneMarket is in the process of recruiting a Chief Financial and Secretary of UAP Holding Corp. (NASD:UAPH) from Officer. John Fleming is currently fulfilling the role of Senior 2001 to 2008, where he also oversaw the environmental Vice President, Finance on an interim basis. health and safety, transportation, and risk management functions. From 1996 to 2001, Mr. Suko was a litigator at McKenna & Cuneo, LLP in Washington D.C. Mr. Suko
WESTFIELD CORPORATION PROPOSAL // PAGE 53 SECTION 4 INFORMATION ON ONEMARKET
Mr John Fleming (Senior Vice President, Finance) OneMarket Limited and will not be considered to be an John Fleming has been the head of Finance for OneMarket independent director. since September, 2016. John has spent the last 17 years Each of the other proposed non-executive directors of in various finance roles with Westfield, including 3 years as OneMarket Limited (Mssrs Atlas, Johnson and Long) will Chief Financial Officer of Westfield’s Brazilian subsidiary. be considered to be an independent director. Prior to his time with Westfield, John spent over 8 years with Deloitte and Touche, and also held Vice President (b) OneMarket Board roles within the restaurant and hospitality industry. John is a (i) Composition and size certified public accountant and is currently a member of the The OneMarket Board will consist of a majority of Accounting Advisory Board for Loyola Marymount University, independent non-executive directors. where he earned his Bachelor of Science degree in 1987. The OneMarket Directors will determine the size of the Prior to the Demerger Implementation Date the directors of OneMarket Board from time to time, subject to OneMarket OneMarket Limited are Steven Lowy, Elliott Rusanow (Chief Limited’s constitution and applicable law, including the rules Financial Officer of Westfield) and Michael Gutman (President concerning board limits under the Corporations Act. The and Chief Operating Officer of Westfield) and the directors of OneMarket Constitution provides that there can be no less OM Delaware are Steven Lowy, Elliott Rusanow and Peter than 3 OneMarket Directors. The number of OneMarket Schwartz (Senior Executive Vice President and General Directors and the composition of the OneMarket Board must Counsel of Westfield). at all times be appropriate to OneMarket Limited to achieve 4.11 Corporate governance efficient decision making and adequately discharge its responsibilities and duties. On the Demerger Implementation The OneMarket Board strongly supports the principles Date, it is proposed that there will be 5 OneMarket Directors. of good corporate governance and is committed to maintaining the highest standards of business behaviour (ii) Roles and responsibilities and accountability within OneMarket after the Demerger. The OneMarket Board has overall responsibility for overseeing the effective management and control of (a) ASX Principles OneMarket on behalf of OneMarket Shareholders, and OneMarket Limited has applied for admission of OneMarket supervising executive management’s conduct of OneMarket Limited to the Official List and for Official Quotation of the Limited’s affairs within a control and authority framework OneMarket Shares on ASX. The ASX Corporate Governance which is designed to enable risk to be prudently and Council has developed and released corporate governance effectively assessed and monitored. recommendations (3rd Edition) (the ASX Principles) for The OneMarket Board has delegated day to day Australian listed entities in order to promote investor management of the business and affairs of OneMarket confidence and to assist companies to meet stakeholder Limited to executive management. However, there are expectations. certain matters which are reserved for the collective decision The ASX Principles are not prescriptions, but guidelines. of the OneMarket Board. The principle underlying this Entities with governance or policies that do not comply with approach is the need to ensure that appropriate matters or meet the ASX Principles need to report on an “if not, why can be dealt with effectively under delegated authority, not” basis. Under the ASX Listing Rules, OneMarket Limited while ensuring good corporate governance by retaining must prepare a corporate governance statement (Corporate OneMarket Board’s control over significant decisions. Governance Statement) that discloses the extent to which OneMarket Limited has followed the ASX Principles and to disclose that statement in its annual report or on its website. As at the date of the Demerger Booklet, OneMarket Limited intends to follow all of the ASX Principles set by the ASX Corporate Governance Council except as disclosed below. Given Mr Lowy’s extensive experience and knowledge of the global retail business, the OneMarket Board considers it is in the best interests of OneMarket Shareholders that Mr Lowy be the Chairman of OneMarket Limited, notwithstanding that he is not an independent director. OneMarket Limited notes the recommendation in the ASX Principles that listed companies should have an independent director as Chairman. Mr Steven Lowy is currently an executive Director and Co-Chief Executive Officer of Westfield and the Lowy family are substantial shareholders of Westfield and will become substantial shareholders of OneMarket Limited. Having regard to these considerations, Mr Lowy will not be considered to be an independent director. Mr Kingsborough is Chief Executive Officer of
PAGE 54 // WESTFIELD CORPORATION PROPOSAL These matters include, among others: Nomination and Remuneration Committee —— OneMarket’s overall strategy and direction The Nomination and Remuneration Committee will be —— appointments to, and removals from, the responsible for assisting and advising the OneMarket Board OneMarket Board in relation to nomination of OneMarket Directors and senior executives, the development and implementation of a —— appointments of, and if necessary replacing, the Chief process for evaluating the performance of the OneMarket Executive Officer and other senior executives, and Board and its committees, evaluating the performance of monitoring their performance and implementation of OneMarket Directors and all key management personnel, OneMarket’s strategic objectives remuneration arrangements and incentive plans, and —— executive compensation and remuneration preparation of the annual remuneration report. —— approval and adoption of OneMarket’s policies and any The Nomination and Remuneration Committee is responsible changes to those policies for formulating the Board Skills Matrix and will also oversee —— the financial controls, compliance and internal control the implementation of OneMarket’s Diversity Policy. and risk management of OneMarket It is proposed that Mark Johnson will be the chairman of the —— changes to OneMarket Limited’s corporate or capital Nomination and Remuneration Committee. structure (iv) Corporate governance policies —— dividend policy and the details for the payment of The OneMarket Board has adopted the following corporate dividends governance policies, each of which has been prepared —— disclosure obligations having regard to the ASX Principles. OneMarket’s policies The OneMarket Board will also delegate some of its and corporate governance practices will continue to be functions to its committees, although overall responsibility reviewed regularly and will continue to be developed and for those functions will remain with the OneMarket Board. refined to meet the needs of OneMarket and best practice. Copies of OneMarket Limited’s Board Charter and the A number of these policies will be available at charters of the OneMarket Board committees will be www.onemarketnetwork.com after ASX Listing. available at www.onemarketnetwork.com after ASX Listing. Code of Conduct (iii) OneMarket Board committees OneMarket Limited is committed to and strives to act To assist in carrying out its responsibilities, the OneMarket honestly and with integrity in all its dealings and to act Board will have an Audit and Risk Committee and a ethically and responsibly. Accordingly, OneMarket Limited Nomination and Remuneration Committee. has adopted a Code of Conduct which provides the values, OneMarket Board committee membership will be restricted commitments, ethical standards and policies of OneMarket to non-executive OneMarket Directors. Each board Limited and outlines the standard of conduct expected of committee will have committee charter which sets out the OneMarket’s business and people. roles, responsibility, composition and processes of each The Code of Conduct applies to all OneMarket Directors, committee. officers, employees, contractors, consultants, other persons that act on behalf of OneMarket Limited and associates of Audit and Risk Committee OneMarket Limited. The Audit and Risk Committee will be responsible for monitoring, reviewing, and making recommendation Disclosure and Communication Policy and reporting to the OneMarket Board on corporate OneMarket Limited is committed to the objective of reporting matters, internal and external audit functions, promoting investor confidence and the rights of investors risk management and related party transactions. by taking steps within its power to ensure that trading The Audit and Risk Committee will be responsible for making in OneMarket Shares occurs in an efficient and well recommendations to the OneMarket Board in relation to the informed market. appointment of the external auditors, the approval of their OneMarket Limited has adopted a Disclosure and remuneration and the terms of their engagement. Communications Policy to: In addition, the Audit and Risk Committee will be responsible —— reinforce OneMarket Limited’s commitment to the for overseeing the executive management on the design continuous disclosure obligations imposed by law and implementation of an appropriate and effective risk —— establish a Disclosure Committee comprised of management framework. The Audit and Risk Committee the General Counsel, the Chief Executive Officer will also review that framework at least once every of OneMarket and the Chief Financial Officer of year and oversee the preparation of summaries and of OneMarket recommendations to the OneMarket Board for the Directors’ Report and the Corporate Governance Statement. It is proposed that Brian Long will be the chairman of the Audit and Risk Committee.
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—— describe the internal procedures OneMarket Trading Policy implements to ensure compliance OneMarket Limited has adopted a Trading Policy which —— outline OneMarket’s corporate governance standards provides a summary on the legal prohibitions on insider and related processes and ensure that investors trading in Australia and details OneMarket Limited’s policy have equal and timely access to material information and rules for trading in its securities (which includes concerning OneMarket OneMarket Shares). Insider trading laws apply to everyone —— outline OneMarket’s commitment to communicating and OneMarket Limited’s additional restrictions apply to effectively with OneMarket Shareholders and to make all OneMarket Directors, officers, other key management it easy for them to participate in general meetings personnel, any other person designated by the OneMarket Board/ and their associates. OneMarket Limited has also adopted Disclosure and Materiality Guidelines to assist employees and officers Risk Management Policy of OneMarket Limited to understand and comply with The OneMarket Board aims to adopt a strategic, consistent OneMarket Limited’s Disclosure and Communication Policy and structured risk management approach in order and OneMarket Limited’s disclosure obligations imposed to achieve an appropriate balance between realising by law. opportunities for gains and minimising losses. The objectives Anti-Bribery & Corruption Policy of the Risk Management Policy are to: OneMarket Limited has adopted an Anti-Bribery & —— ensure that OneMarket Limited makes informed Corruption Policy to reinforce its strict prohibition to the offer, decisions with respect to the activities that it provision, solicitation or acceptance of bribes, and to set out undertakes by appropriately considering both risks and OneMarket Limited’s standards and guidelines in connection opportunities with anti-bribery and corruption. —— incorporate effective risk management as part of OneMarket’s strategic planning process Whistleblower Policy —— outline roles and responsibilities of the OneMarket OneMarket Limited has adopted a Whistleblower Policy Board, the Audit and Risk Committee, management, which promotes and reinforces OneMarket Limited’s Chief Risk Officer and individual staff in relation to risk culture of honest and ethical behaviour by providing a management mechanism which encourages concerns to be raised about misconduct, malpractice, irregularities or any other —— develop and confirm a risk management framework behaviour which is dishonest, corrupt, illegal or inconsistent 4.12 Employees and human resources with any of OneMarket Limited’s value or policies, without the person raising the concern being subject to victimisation, The OneMarket Group has approximately 160 full-time harassment or discriminatory treatment. employees who are based primarily in the United States and the United Kingdom. Depending on the geographic region Board Skills Matrix Memorandum in which they work, the OneMarket Group’s employees are OneMarket Limited has prepared a memorandum to assist employed by OneMarket Network, LLC, OneMarket Limited, OneMarket Limited to develop and review its Board Skills OneMarket Network UK Services Limited or OneMarket Matrix and for disclosure in accordance with the ASX Network Europe Limited. The OneMarket Group’s employees Principles. The Nomination and Remuneration Committee are not subject to collective bargaining agreements. is responsible for formulating the actual Board Skills Matrix which will be disclosed to ASX in OneMarket Limited’s annual corporate governance statement. Diversity Policy OneMarket Limited’s Diversity Policy reflects the commitment of the OneMarket Board to create and ensure a diverse work environment in which everyone is treated fairly and with respect and where everyone feels responsible for the reputation and performance of OneMarket. OneMarket Limited has delegated to the Nomination and Remuneration Committee oversight of the implementation of the Diversity Policy.
PAGE 56 // WESTFIELD CORPORATION PROPOSAL (a) Employment agreements OneMarket’s remuneration to its employees is based OneMarket’s senior executives are currently employed under heavily on individual and corporate outcomes. The broad written employment agreements governed by California law. remuneration structure to be adopted by OneMarket Each of these agreements is generally terminable “at will”, following implementation of the Demerger will comprise: which means that either the employee or the company may —— Base salary terminate the employment relationship without notice at any —— Short term incentive – comprising a cash time. The employment agreements provide the terms of the performance bonus remuneration which may be conferred on the employees during their period of employment (such as base salary, —— Long term incentive – which will be awards performance bonuses, participation in incentive plans, and granted under the 2018 Equity Incentive Plan severance payments and benefits). as described below In connection with their employment, employees typically Fixed remuneration enter into a non-disclosure, non-solicitation and assignment Base salary agreement that includes customary provisions governed by Base salary or fixed remuneration is reviewed annually California law relating to the non-disclosure of confidential and advised to the executive. Base salary levels are information, non-solicitation of employees and confirming benchmarked regularly against competitors. All senior that all products, inventions and intellectual property executives are paid in US dollars. developed during the term of the employee’s employment The fixed remuneration for OneMarket’s key management is owned by their employer. personnel for the current financial year ending 31 December Enforcement of post-termination non-compete restrictions 2018 is set out below: in employment contracts is a matter of state law in the United States and courts generally look disfavourably Component of Don on non-compete provisions that are not narrowly drawn. Remuneration Kingsborough Mike Blandina California, in particular, prohibits non-compete agreements, Base salary $1,400,000 $650,000 except in certain very limited circumstances. As a result, the employment agreements of any OneMarket employees At risk remuneration located in California, including Don Kingsborough and Short term incentives the other key executives, do not include non-compete provisions. Short term incentives are closely linked to the achievement against specified performance targets for specified key Refer to section 8.6 for a summary of the key terms of performance indicators (KPIs) which are established each Donald Kingsborough’s employment agreement. year pursuant to a performance review and development (b) Principles of remuneration system. Under the system, senior management and the The principal remuneration objectives of OneMarket are to: executive work together prior to the commencement of each financial year to establish agreed upon KPIs for that year’s —— Fairly reward executives having regard to their short term incentive (which may be based on business and individual performance against agreed objectives, personal development KPIs). These KPIs and objectives are the overall performance of the OneMarket business designed to recognise and reward both financial and non- and the external compensation environment in which financial performance. The objectives may vary according to OneMarket operates the role of the particular executive and will typically relate to —— Enable OneMarket to attract and retain key executives the performance of OneMarket’s business. capable of contributing to the development of At the commencement of each financial year, each member OneMarket’s business, who will create sustainable of the senior executive team is advised of a target short term value for shareholders and other stakeholders incentive which is the amount that OneMarket would expect —— Appropriately align the interests of executives with to pay or award to an executive for the achievement of shareholders previously agreed upon KPI objectives. The remuneration provided to OneMarket executives takes The target short term incentives for OneMarket’s key into account the highly competitive and rapidly changing management personnel for the current financial year ending nature of the high technology industry in Silicon Valley 31 December 2018 are set out below: California so as to attract and retain the best technology talent available. Component of Don Remuneration Kingsborough Mike Blandina Target bonus under $1,400,000 $650,000 short term incentive
WESTFIELD CORPORATION PROPOSAL // PAGE 57 SECTION 4 INFORMATION ON ONEMARKET
Long term incentives (c) Key Management Personnel OneMarket employees who have previously participated The Corporations Act requires certain annual reporting in Westfield’s employee incentive plans will have all rights obligations concerning the KMP of OneMarket. A KMP is an accelerated on the effective date of the Unibail-Rodamco executive responsible for planning, directing and controlling Transaction. OneMarket’s activities. Following completion of the Demerger, long term incentives As at the date of this Demerger Booklet the KMPs of will be delivered through awards under the 2018 Equity OneMarket are Don Kingsborough and Mike Blandina. Incentive Plan described below. Details of each KMP’s fixed and at risk remuneration for The vesting requirements that apply under the 2018 the current financial year ending 31 December 2018 are Equity Incentive Plan will be determined annually by the provided above. OneMarket Board. As noted in section 4.10, Mr Kingsborough has a health For restricted stock unit (RSU) awards made to the majority issue that is being closely monitored. of employees in 2018, vesting will occur after both of a (d) Summary of 2018 Equity Incentive Plan time vesting condition and a liquidity event condition has been satisfied. The time vesting condition will be satisfied The OneMarket Board has approved and the board of over a 4-year term with the condition satisfied as to 25% of directors of OM Delaware has approved and adopted the the award on the first anniversary of the date of grant and 2018 Equity Incentive Plan. The 2018 Equity Incentive Plan then monthly on a pro rata basis over the following three provides for the grant of incentive stock options, within the years. The liquidity event condition will be satisfied when meaning of Section 422 of the U.S. Internal Revenue Code, OM Delaware undergoes a change in control or conducts to OM Delaware’s employees and any parent and subsidiary an initial public offering of its common stock. Any plan corporations’ employees, and for the grant of non-statutory participant who ceases to provide services to OneMarket stock options, restricted stock, restricted stock units, and prior to full vesting of the award will forfeit any RSUs as to stock appreciation rights to employees and consultants of which the time vesting condition has not been satisfied, and the OneMarket business and to directors of OM Delaware. any RSUs as to which the time vesting condition has been It is expected that restricted stock units will typically satisfied as of the termination of the participant’s service will be granted to senior executives and employees of the remain eligible to vest if a liquidity event occurs before the OneMarket business. deadline specified in the participant’s RSU agreement. If a It is currently expected that, as part of the implementation liquidity event does not occur by such deadline, the then- of the Demerger, grants under the 2018 Equity Incentive unvested portion of the participant’s award will be forfeited. Plan will be made to employees of OneMarket equal to The Key Management Personnel (KMP) and certain other approximately 3,200,000 shares of OM Delaware common members of OneMarket’s senior executive team will receive stock, representing up to 16% of the issued capital of OM RSUs that are subject to time-based vesting conditions Delaware on a fully diluted basis. only. Time-based vesting will take place in equal quarterly Authorised shares instalments over a 4-year period. A total of 4,000,000 shares of OM Delaware common stock Please note that circumstances may change, and (representing 20% of the issued capital of OM Delaware on accordingly, OM Delaware may later decide to issue RSU a fully diluted basis) have been reserved for potential issue awards with different terms or other types of equity awards. under the 2018 Equity Incentive Plan. Long term incentives issued under the 2018 Equity Incentive The 2018 Equity Incentive Plan provides that shares of Plan will be capped at 20% of the equity of OM Delaware. common stock issued pursuant to awards under the 2018 Details of the initial issue of long term incentives under the Equity Incentive Plan that OM Delaware repurchases or that 2018 Equity Incentive Plan are included in section 4.12(d). are forfeited due to the failure to vest, shares of common In connection with the implementation of the Demerger it stock subject to awards under the 2018 Equity Incentive is intended that the following long term incentives will be Plan that expire or become unexercisable without having granted to the key management personnel pursuant to the been exercised in full or are surrendered under an exchange 2018 Equity Incentive Plan. program, and shares of common stock used to pay the exercise price of an award or to satisfy the tax withholding KMP Type of Incentive Number of securities obligations related to an award will become available Donald Restricted stock 700,000 (representing for future grant under the 2018 Equity Incentive Plan. In Kingsborough units 3.5% of the share capital addition, to the extent that an award is paid out in cash of OM Delaware on a fully rather than shares of common stock, such cash payment diluted basis) will not reduce the number of shares of common stock Mike Blandina Restricted stock 290,000 (representing available for issuance under the 2018 Equity Incentive Plan. units 1.45% of the share capital of OM Delaware on a fully diluted basis)
PAGE 58 // WESTFIELD CORPORATION PROPOSAL Plan administration Stock options OM Delaware’s board of directors or a committee appointed The per share exercise price of an option generally will be by OM Delaware’s board of directors will administer the at least equal to the fair market value of a share of OM 2018 Equity Incentive Plan. Subject to the provisions of the Delaware common stock on the date of grant, and the 2018 Equity Incentive Plan, the OM Delaware Board has the term of an option will not exceed 10 years. However, any power to administer the 2018 Equity Incentive Plan, such as incentive stock option granted to any employee who owns the power to interpret the terms of the 2018 Equity Incentive more than 10% of the voting power of all classes of OM Plan and awards granted thereunder; to create, amend Delaware’s outstanding stock will not have a term of more and revoke rules relating to the 2018 Equity Incentive Plan, than five years or a per share exercise price less than 110% including creating sub-plans, and to determine the terms of the fair market value of a share of OM Delaware common of the awards, including the exercise price, the number of stock on the grant date. The administrator will determine shares of common stock subject to each such award, the the methods of payment of the exercise price of an option. exercisability of the award, and the form of consideration, After the termination of a participant’s service, he or she will if any, payable upon exercise. be able to exercise the vested portion of his or her option Types of awards under the 2018 Equity Incentive Plan for the period of time stated in his or her option agreement, which generally will be 12 months for a termination due to The types of awards that may be granted under the 2018 death or disability or 3 months following a termination for Equity Incentive Plan include restricted stock, restricted any other reason. However, in no event will an option be stock units, stock options and stock appreciation rights. exercisable after the expiration of its term. It is expected that awards will typically be in the form of restricted stock units. Stock appreciation rights Restricted stock units Stock appreciation rights allow the recipient to receive an amount referable to the appreciation in the fair Restricted stock units are effectively rights representing an market value of shares of OM Delaware common stock amount equal to the fair market value of one share of OM between the exercise date and the date of grant. Subject Delaware common stock. The administrator will determine to the provisions of the 2018 Equity Incentive Plan, the the terms and conditions of restricted stock units, including administrator will determine the terms of stock appreciation the vesting criteria (such as meeting specified performance rights, including when such rights become exercisable criteria or a continuous specified period of service with and whether to pay any increased appreciation in cash, OM Delaware) and the form and timing of payment. The shares of OM Delaware common stock, or a combination administrator has the discretion to accelerate the time at of cash and shares. The per share exercise price of a stock which any restrictions will lapse or be removed. appreciation right will be at least 100% of the fair market Restricted stock value of a share of OM Delaware common stock on the date Restricted stock awards are grants of shares of OM of grant, and the term of a stock appreciation right will not Delaware common stock that vest in accordance with terms exceed 10 years. The same rules that relate to exercise of and conditions established by the administrator, with any an option after termination of service also will apply to stock such shares that do not vest subject to OM Delaware’s right appreciation rights. of repurchase or forfeiture upon termination of the recipient’s Non-transferability of awards service. The administrator will determine the number Unless the administrator provides otherwise, the 2018 Equity of shares of restricted stock granted to any employee, Incentive Plan generally does not allow for the transfer of director, or consultant, and subject to the provisions of the awards and only the recipient of an award will be able to 2018 Equity Incentive Plan, will determine the terms and exercise an award during his or her lifetime. conditions of such awards. Certain adjustments The administrator may impose whatever conditions to In the event of certain changes in OM Delaware’s vesting it determines to be appropriate (such as the capitalisation, to prevent diminution or enlargement of the achievement of specific performance goals or continued benefits or potential benefits available under the 2018 Equity service to OM Delaware), and the administrator has the Incentive Plan, the administrator will adjust the number and discretion to accelerate the time at which any restrictions will class of shares that may be delivered under the 2018 Equity lapse or be removed. Recipients of shares of restricted stock Incentive Plan and/or the number, class, and price of shares generally will have voting and dividend rights with respect to covered by each outstanding award. such shares regardless of whether they are vested, unless the administrator provides otherwise.
WESTFIELD CORPORATION PROPOSAL // PAGE 59 SECTION 4 INFORMATION ON ONEMARKET
Dissolution or liquidation As a standalone group, OneMarket will be required to add In the event of OM Delaware’s proposed liquidation or staffing and build and/or acquire systems to replace the dissolution, the administrator will notify participants and services currently provided by Westfield Corporation. In all awards granted under the 2018 Equity Incentive Plan the near term, OneMarket will likely rely on outsourcing will terminate immediately before the completion of such to fill these needs, resulting in additional costs as it builds proposed transaction. its internal capabilities. OneMarket expects to incur costs associated with replacing services previously provided Merger or change in control by Westfield of approximately $1.6 million per annum. In In the event of a merger or change in control of OM addition, OneMarket will incur set up and implementation Delaware, OneMarket expects that the successor costs related to these services. corporation, its parent or a subsidiary will assume or In addition, OneMarket Limited will be required to establish substitute an equivalent award for any outstanding award. financial reporting, company secretarial, and corporate Otherwise, in the event of a merger or change in control communications functions in Australia to satisfy ASX the administrator has a broad discretion to determine how requirements. OneMarket Limited currently does not have outstanding awards will be treated. plans to add staff in Australia and currently intends to rely on If a successor corporation, its parent or a subsidiary does outsourcing to meet these requirements. Costs associated not assume or substitute an equivalent award for any with complying with ASX requirements for a publicly listed outstanding award, then the relevant award will fully vest, company are expected to be approximately $2.3 million all restrictions on such award will lapse, all performance per annum. goals or other vesting criteria applicable to that award will be deemed achieved at 100% of target levels and that award 4.14 Acquisitions will become fully exercisable, if applicable, for a specified OneMarket’s acquisition strategy has focused on sourcing period before the transaction, unless a written agreement talent and/or technology to accelerate OneMarket’s with the participant provides otherwise. The award will then product development and growth. To date, OneMarket terminate at the end of that period. has acquired three companies: 12 Digit Marketing, Inc. Amendment and termination (12 Digit) in February 2017; FluidM, Inc. (FluidM) in March 2017 and Paperless Receipts Ltd (which has since changed OM Delaware’s board of directors has the authority to its name to OneMarket Network UK Limited) (Yocuda) in amend, suspend or terminate the 2018 Equity Incentive Plan September 2017. at any time but any such action may not impair the rights of any participant without his or her written consent. The 12 Digit, founded in 2015 and based in Redwood City, 2018 Equity Incentive Plan will automatically terminate in California, provides a digital advertising marketplace with 2028, unless OM Delaware’s board of directors terminates shopper purchase and product interest data from large, it sooner. multi-brand retailers across the United States. Virtually the entirety of 12 Digit’s business, including its relationships with 4.13 Impact of separation (i.e. new back office) brands that sell through multi-brand retailers, continues to OneMarket Limited will incur both one-time and incremental operate as the OneMarket Shopper Exchange and the co- costs associated with being a standalone public company founders of 12 Digit have assumed similar leadership roles listed on the ASX. Currently, Westfield Corporation provides in the Shopper Exchange business unit of OneMarket. services to OneMarket in the form of corporate IT systems FluidM, founded in 2015 and based in Fremont, California, and/or internal staffing in the following areas: was an early-stage, pre-revenue start-up focused on —— Human resource systems and administration intelligent, context-aware voice assistants available across —— Compensation and benefits different communication interfaces. The technical know- how of the FluidM team, including its research into voice —— Payroll recognition, natural language processing and chatbot —— Finance and accounting technologies continues to be used in the development of —— Audit OneMarket’s voice-enabled shopping assistant enabling —— Tax technology, which is a component of the Live Receipts product vision. In addition, the three co-founders of FluidM —— Insurance and risk management have assumed senior leadership roles within OneMarket. —— Treasury Yocuda, founded in 2011 and based in London, England, —— Legal and compliance provides digital receipts (primarily delivered to consumers —— Investor relations via e-mail) for United Kingdom headquartered retailers, including large, multi-brand retailers. The technical and market know-how of the Yocuda team, as well as portions of Yocuda’s digital receipts product design, were employed to accelerate the development and release of OneMarket’s Live Receipts product.
PAGE 60 // WESTFIELD CORPORATION PROPOSAL OneMarket intends to continue to look proactively for Security Operations Centre: OneMarket operates a 24-7 acquisition targets that provide capability that is consistent security operations centre (SOC). This team is responsible with OneMarket’s near-to-mid-term business plan. In for monitoring the security of the OneMarket platform. The addition, OneMarket will also consider opportunistically SOC seeks to follow security industry standards as they are acquiring targets that have the potential to become more updated and frequently reviews and upgrades its processes valuable once integrated with the OneMarket network. and technology with a view to addressing emerging issues in data security technology. In addition to monitoring, the 4.15 IP/data ownership SOC is the point of contact for all suspected and confirmed (a) Data Ownership security incidents. Any data provided to OneMarket by network participants Policy: OneMarket’s security team is responsible for the for the purpose of providing OneMarket services is the development, training, enforcement and roll-out of all property of the participant that originally provided it. If a OneMarket security policies. The following list represents participant terminates its arrangements with OneMarket, examples of the topics covered by the OneMarket OneMarket will dispose of the data that the participant information security policy library: provided from the platform in accordance with the terms —— acceptable use of the relevant agreement but OneMarket is entitled to retain —— containerisation standard any data derived from the participant’s data (subject to applicable law). —— data handling standard As part of providing its services and creating derived data, —— data storage standard OneMarket may license or purchase third-party data from —— disaster recovery standard a variety of sources. Each individual agreement has terms —— encryption standard providing for the disposition of third-party data (which may —— general engineering security include deletion) upon termination of the agreement (subject to applicable law). However, in most cases derived data that —— general incident response is produced from the use of third party data is the property —— information logging standard of OneMarket. —— password construction (b) Data storage —— password protection OneMarket utilises Google’s Cloud Platform and Virtual —— penetration testing standard Private Cloud for data storage and cloud computing —— remote access policy services. The Google Cloud Platform is a suite of cloud computing services that runs on the same infrastructure —— server security that Google uses internally for its end-user products, such —— third party provider security standard as Google Search and YouTube. Google’s Virtual Private —— vulnerability assessment standard Cloud permits OneMarket to create a private network with These policies apply to any OneMarket employees, customised firewalls and other security provisions. The contractors, service providers and affiliates who obtain, services available under the Google Cloud Platform support access or generate OneMarket or client data. the technologies contained in the OneMarket platform, including its operational and analytical systems. OneMarket Runbooks: OneMarket has addressed many specific types also utilises Google’s GSuite services for email, conferencing, of incidents with customised response plans in an effort to document management and other enterprise IT functions. ensure appropriate response and resolution. OneMarket utilises a runbook methodology with ready-to-use incident (c) Data Protection specific books providing step by step actions on what to do OneMarket has invested heavily in its information security in a given incident scenario. infrastructure and has built an information security team, Training: OneMarket employees will be trained on applicable program and platform designed to protect its digital policies during their onboarding and will receive regular, updated assets, data and other critical technology in the OneMarket training as policies are added and existing policies modified. ecosystem. In addition, OneMarket’s legal department Enforcement: OneMarket seeks to verify compliance with works with the information security team to highlight specific all policies through various methods, including business legal and regulatory requirements and to seek to ensure tool reports, internal and external audits and policy owner that OneMarket’s contracts and partnerships protect feedback. Any OneMarket employees found in violation the company. Set out below is a high-level overview of of policy may be subject to disciplinary action, including various security programs, processes and initiatives that termination of employment. Any third-party partner or are designed to protect both OneMarket infrastructure and OneMarket vendor found in violation of OneMarket policies systems and the client data within the OneMarket platform. may have their network access terminated and their contract terminated.
WESTFIELD CORPORATION PROPOSAL // PAGE 61 SECTION 4 INFORMATION ON ONEMARKET
Encryption: OneMarket encrypts (both in transit and at-rest) Under Section 5, an act or practice may be considered all personally identifiable information (PII) and all sensitive “unfair” if it causes or is likely to cause substantial injury to personally identifiable information (SPII). OneMarket uses consumers, cannot be reasonably avoided by consumers, industry standard encryption technology (AES-256 or better) and is not outweighed by countervailing benefits to with strong minimum requirements. Whenever possible, consumers or to competition. Additionally Section 5 is OneMarket devices utilise whole disk encryption. interpreted such that a representation, omission, or practice When it comes time to remove PII or SPII data, OneMarket may be considered “deceptive” if it misleads or is likely has policies that enforce a secure-deletion process meeting to mislead a consumer, is material, and the consumer’s the United States Department of Defense 5220.22-m interpretation of the representation, omission, or practice is standard. Non-PII/SPII data is disposed of using standard reasonable under the circumstances. data disposal processes. The FTC and state regulators have pursued investigations Testing and Reporting: OneMarket performs regular and other regulatory proceedings relating to privacy and data internal vulnerability and network penetration scanning, at handling under assertions that companies have engaged in least monthly or more often depending on the requirements both “unfair” and “deceptive” acts or practices. In particular, of the software, product or platform. In addition to numerous companies have faced regulatory enforcement OneMarket’s own internal scanning, OneMarket has actions relating to regulators’ assertions that the companies quarterly third-party scans performed by an external vendor. have failed to comply with representations they have made to consumers, whether in privacy policies, privacy notices, If required under its contractual arrangements, OneMarket or otherwise, regarding privacy or data handling. will make high level overviews and reports from these scans available to clients and partners. (ii) Self-Regulatory Standards Digital Advertising Alliance (DAA) (d) Patents and trademarks The DAA has issued self-regulatory principles for the The OneMarket Group holds 7 patents and has 49 patent collection and use of multi-site data (information collected applications pending. In 2017 the OneMarket Group filed from a particular computer or device regarding web 25 patent applications in the United States, 2 patent browsing over time and across unaffiliated websites), cross- applications in the United Kingdom and 5 international app data (information collected from a particular device patent applications under the Patent Cooperation Treaty. regarding application use over time and across unaffiliated In 2016 the OneMarket Group filed 14 patent applications applications) and precise location data (data about the in the United States, 2 patent applications in Canada, 2 physical location of a device that is sufficient to locate a patent applications in Europe and 2 patent applications specific individual or device). in Australia. In 2015 the OneMarket Group filed 4 patent applications in the United States. The OneMarket Group has The DAA and its enforcement arms, the Council of 16 trademark applications pending, including in relation to Better Business Bureaus (BBB) and the Direct Marketing the OneMarket name. Association (DMA) have asserted that they have authority to police all parties engaged in activities governed by the DAA’s 4.16 Regulatory environment self-regulatory principles and to bring those entities into (a) United States compliance, even if the entities have not declared that they comply with the principles. This assertion may be subject (i) Federal Trade Commission & State Attorney General to question but many companies choose to cooperate Enforcement: with BBB or DMA investigations or inquiries and voluntarily In the United States the primary legal standard governing amend their practices to align with DAA guidelines because the collection, use and disclosure of information relating the BBB or DMA may report companies to the FTC for to consumers and their devices is section 5 of the Federal potential violations of consumer protection laws or may Trade Commission (FTC) Act (Section 5), enforced by publicly report that companies are not in compliance with the FTC, which prohibits “unfair” or “deceptive” practices the DAA guidelines if the companies do not cooperate. in or affecting commerce. In addition, most states have enacted “little FTC Acts” that prohibit unfair or deceptive Network Advertising Initiative (NAI) trade practices, and state regulators often pattern their Unlike the DAA, the NAI purports to exert enforcement enforcement activities relating to privacy and the protection authority only over its members, which generally include of data on FTC precedent. advertising networks and other digital advertising companies. OneMarket’s Shopper Exchange product adheres to the NAI Code of Conduct. OneMarket’s activities outside of its Shopper Exchange Product are not subject to the NAI.
PAGE 62 // WESTFIELD CORPORATION PROPOSAL The NAI maintains and publishes a code of conduct that All of the obligations in the DPA, and most of the obligations requires transparency and certain choices for interest-based in the GDPR, are imposed upon the “controllers” of personal advertising (the use of data collected across unaffiliated data, i.e., the entity which “determines the purposes and websites for purposes of delivering advertising based means” for which personal data is processed. In general, on inferred preferences or interests), cross-application OneMarket will be a “processor” for the non-derived advertising (the use of data collected across unaffiliated European personal data it receives from its clients and mobile applications for purposes of delivering advertising processes on their behalf, but OneMarket will be a controller based on inferred preferences or interests), and the use for the proprietary European personal data that OneMarket of precise location data for cross-app or interest-based derives from its participants’ and/or third-party data. Most advertising. of the obligations under PECR are imposed upon the The NAI maintains a monitoring and enforcement function sender of the communication, but it is unclear whether that utilises technical monitoring tools, investigation of these obligations will shift under the forthcoming e-Privacy consumers’ concerns, and investigations of other complaints Regulation. Both the DPA and the PECR are enforced by the in order to take steps to ensure that NAI members are UK Information Commissioner’s Office, and it is anticipated compliant with the NAI’s code of conduct. The NAI may that the UK Information Commissioner also would enforce provide for sanctions, including suspension or revocation the UK Data Protection Bill if it is enacted. of NAI membership and may refer matters to the FTC for potential violations of consumer protection laws. The NAI also may publicly name companies and their violations when the NAI determines that a member has engaged in a material violation of its code of conduct. (b) European Union OneMarket’s European operations are based in London, England. The two primary pieces of UK data protection legislation relevant to OneMarket’s operations in Europe are the Data Protection Act 1998 (UK) (the DPA) and the Privacy and Electronic Communications Regulations 2003 (UK) (PECR), both of which are based on underlying European legislation (Directive 95/46/EC and Directive 2002/58/EC respectively). Both of these pieces of legislation are in the process of being updated. The DPA will be superseded by the General Data Protection Regulation 2016/679 (the GDPR) on May 25, 2018. The replacement for PECR, the draft e-Privacy Regulation has not yet been agreed upon by European legislators but OneMarket understands that the intention is that it will become effective sometime in 2018. The GDPR is an overarching regulation that governs the collection, use, disclosure and retention of personal data in the European Union (of which the United Kingdom remains a member, although its government has invoked Article 50 of the European Union’s Treaty of Lisbon in order to negotiate regarding the exit of the United Kingdom from the European Union). The United Kingdom is anticipated to enact legislation that is consistent with the GDPR, subject to relatively minor national-level variation and certain additional provisions, in 2018. PECR and the forthcoming e-Privacy Regulation governs specific processing activities of personal data, in particular the transmission of marketing and electronic communications (including the use of cookies) and the contents thereof. The e-Privacy Regulation is anticipated to prevail in the event there is a conflict between the text of the GDPR and the e-Privacy Regulation with respect to electronic communications.
WESTFIELD CORPORATION PROPOSAL // PAGE 63 SECTION 5 FINANCIAL INFORMATION ON ONEMARKET
This section contains OneMarket’s historical financial information and proforma historical statement of financial position 5.1 OneMarket Financial Information —— details of significant accounting policies (refer Historically, OneMarket was not a legal entity or group section 5.7) of entities. Refer to section 4.2 for further information on —— information regarding OneMarket’s cash requirements OneMarket. It was also not previously a reporting entity and (refer section 5.8) had not been required to prepare standalone consolidated —— details of the proposed dividend policy (refer financial statements. As a result, the OneMarket special section 5.9) purpose financial statements were prepared for the purpose of presenting the combined historical financial position, 5.2 Basis of preparation and presentation of the performance and cash flows of that part of Westfield’s retail Financial Information technology business utilised by the OneMarket Group to The Financial Information has been presented for illustrative develop its retail technology network & product solutions. purposes, to assist Westfield Shareholders to understand The financial information presented in this section therefore the historical combined financial performance, financial incorporates financial information previously included in the position and cash flows of that part of Westfield’s retail financial statements of Westfield Corporation. technology business utilised by the OneMarket Group to The financial information for OneMarket contained in this develop its retail technology network & product solutions. section includes: The Historical Financial Information of OneMarket has —— historical statements of profit and loss for the years been derived from the OneMarket special purpose financial ended 31 December 2015 (FY15), 31 December statements for FY15, FY16 and FY17. The OneMarket 2016 (FY16) and 31 December 2017 (FY17) (Historical special purpose financial statements have been audited Statements of Profit and Loss); by Ernst & Young in accordance with Australian Auditing —— historical cash flows for FY15, FY16 and FY17 Standards. Ernst & Young issued unqualified audit opinions, (Historical Cash Flows); which, in accordance with Australian Auditing Standards, contained an emphasis of matter on the basis of accounting —— historical statement of financial position as at 31 as these are special purpose financial statements. The December 2017 (Historical Statement of Financial special purpose financial statements can be viewed at Position), www.westfieldcorp.com/investors/transaction-information. together, the Historical Financial Information; and the The Historical Financial Information therefore incorporates —— pro forma historical statement of financial position of financial information previously included in the financial the OneMarket Group as at 31 December 2017 (Pro statements of Westfield. Forma Historical Statement of Financial Position), The Historical Financial Information has been prepared the Historical Financial Information and Pro Forma Historical in accordance with the recognition and measurement Statement of Financial Position together being the Financial principles of Australian Accounting standards including Information. Australian Accounting Interpretations (which are consistent Also summarised in this section 5 are: with International Financial Reporting Standards (IFRS) and interpretations issued by the International Accounting —— the basis of preparation and presentation of the Standards Board (IASB)) relevant for income statements, Financial Information (refer section 5.2) statements of financial position and statements of cash —— details of OneMarket’s liquidity and capital resources flows with the exception of AASB 10 Consolidated Financial (refer section 5.4) Statements. This basis of preparation is consistent to the OneMarket special purpose financial statements.
PAGE 64 // WESTFIELD CORPORATION PROPOSAL The Historical Financial Information has been prepared on a The historical share based employee benefit liability has historical cost basis except for contingent consideration and been included in the Financial Information for employees unlisted investments which are presented at fair value. who will become employees of OneMarket post demerger As OneMarket was not historically a legal entity, or group of and has been calculated with reference to awards under entities, it is not possible to show share capital or an analysis Westfield employee award schemes. of reserves. As such, Westfield’s interest in the net assets of For the purpose of preparing the Historical Financial OneMarket has been presented as “Invested Capital”. Information, no adjustments have been made to costs The principal accounting policies of OneMarket which have incurred by Westfield and allocated as outlined above been applied in the preparation of the Historical Financial to reflect the operation of OneMarket as a stand-alone Information are described in detail in section 5.7. These business. policies have been applied consistently for all periods Working capital transactions relating to OneMarket were presented. immediately funded by investment capital from Westfield Acquired entities, considered part of OneMarket, have been up to, and including, 31 December 2017. included in the Financial Information from the date control Assets of OneMarket at 31 December 2017 include a was obtained by Westfield and as if the acquisition had been contribution of cash of $197.0 million in accordance performed by OneMarket as a standalone business, funded with the terms of the demerger agreement. by invested capital from Westfield. The Pro Forma Historical Statement of Financial Position OneMarket is an early stage technology operation, with has been derived from the Historical Statement of revenues unable to be forecast with sufficient reliability Financial Position and adjusted for the effects of pro forma to support the carrying value of acquired goodwill. As a adjustments described in section 5.3 below. consequence, acquired goodwill has been impaired in full The Pro Forma Historical Statement of Financial Position at 31 December 2017. has been prepared in accordance with the recognition and Expenses incurred by Westfield’s retail technology business measurement principles contained in Australian Accounting and attributable to OneMarket, have been determined Standards and International Financial Reporting Standards as follows: issued by the International Accounting Standards Board 1 Direct workforce costs have been allocated to (IFRS), with the exception of the requirements of AASB 10 OneMarket based upon the time incurred on the Consolidated Financial Statements and includes adjustments development of OneMarket technology as recorded which have been prepared in a manner consistent with IFRS in periodic timesheets that reflect the impact of the Demerger as if it had occurred as at 31 December 2017. Due to its nature, the Pro Forma 2 Other direct costs which relate specifically to Historical Statement of Financial Position does not represent OneMarket activities based on actual cost incurred OneMarket Limited’s actual or prospective financial position. 3 Management costs, have been allocated to OneMarket OneMarket operates on a financial year ended 31 December. based upon quarterly estimates of their time spent on All amounts disclosed in this section 5 are presented in US OneMarket activities Dollars which is the reporting currency of Westfield and 4 Indirect costs, such as travel, facility and marketing will be the reporting currency of OneMarket and, unless costs, have been allocated based upon the proportion otherwise noted, are rounded to the nearest $1,000. of total direct workforce costs (1. above) and The Financial Information is presented in an abbreviated management costs ( 3. above) incurred on OneMarket form insofar as it does not include all of the presentation activities, relative to the total expenses incurred by and disclosures, statements or comparative information Westfield’s retail technology business from which required by IFRS and other mandatory professional reporting OneMarket has been derived requirements applicable to general purpose financial reports 5 Overheads incurred for central accounting, human prepared in accordance with the Corporations Act. resources, information technology, treasury, tax and The Investigating Accountant has prepared the Independent finance services have been allocated based upon the Limited Assurance Report in respect of the Financial proportion of total costs as allocated to OneMarket in Information, as defined above, a copy of which is included items 1-4 above, relative to the total expenses incurred in Annexure B. by Westfield’s retail technology business from which OneMarket has been derived 6 Costs of the senior corporate executives of Westfield are allocated to OneMarket based on their estimate of the time spent on OneMarket activities. The allocation is 20% for 2015, 40% for 2016 and 60% for 2017 of Westfield recharges to the Westfield’s retail technology business from which OneMarket has been derived
WESTFIELD CORPORATION PROPOSAL // PAGE 65 SECTION 5 FINANCIAL INFORMATION ON ONEMARKET
5.3 OneMarket Financial Information 2017 Acquisitions OneMarket acquired 12 Digit, an advertising technology business in February 2017 for $40 million in initial consideration (prior to adjustments) and contingent consideration ranging between $0 and $85 million depending on future performance (refer to section 8.8). OneMarket Network UK Limited (Yocuda), a technology company specialising in digital receipts, was acquired in September 2017 for $11.3 million and FluidM an early stage start-up business focused on intelligent, context aware voice assistants available across different communication interfaces in March 2017 for $3.5 million (prior to adjustments) (including $1.0 million contingent consideration). The Historical Statements of Profit and Loss and the Historical Cash Flows have not been adjusted to include the pre- acquisition results of these acquisitions and as such only include the results post-acquisition. From the date of acquisition, 12 Digit contributed $1.7 million of revenue and $12.4 million of loss before tax from continuing operations and Yocuda contributed $0.4 million of revenue and $0.7 million of loss before tax from continuing operations. If the acquisitions had taken place at the beginning of the FY17 year, the revenue from continuing operations are estimated to have been $1.3 million higher and the loss before tax from continuing operations is estimated to have been $2.2 million higher than the results as reflected above. Impairment of assets OneMarket is in the early phase of its life cycle developing a comprehensive suite of products and services. At 31 December 2017, OneMarket was in discussions with brands, retailer and shopping venues to enter into contracts in relation to OneMarket’s proposed product and service offerings. Management have determined that as those discussions were at an early stage, they were unable to produce cash flow forecasts for OneMarket with sufficient reliability to support the acquired goodwill. As such, the goodwill was fully impaired at 31 December 2017. (a) Historical Statements of Profit and Loss Table 5.3.1 Historical Statements of Profit and Loss for FY17, FY16 and FY15 for OneMarket. Historical Statements of Profit and Loss US $’000 FY17 FY16 FY15
Revenue 2,159 – – Employee benefit expense (45,916) (19,680) (2,125) Deferred employee costs (3,613) (1,220) (124) Administration and other expenses (16,098) (10,897) (424) Corporate overheads (9,763) (7,604) (1,548) Depreciation of property, plant and equipment (502) (623) (592) Impairment of assets (56,987) – – Fair value write down of investments (1,256) (3,333) (1,768) Capital transaction costs (1,382) – – Operating loss before tax (133,358) (43,357) (6,581) Income tax expense – – – Net loss after tax (133,358) (43,357) (6,581)
The above Historical Statements of Profit and Loss represent 100% of OneMarket. If the Demerger proceeds Westfield will retain 10% of OneMarket.
PAGE 66 // WESTFIELD CORPORATION PROPOSAL A proforma adjustment to reflect this economic interest has been made to the Historical Statement of Financial Position at section 5.3 (c) below. The Historical Statements of Profit and Loss include corporate overheads charged by Westfield of $9,763,000 for FY17 ($7,604,000 for FY16 and $1,548,000 for FY15). Upon the Demerger becoming Effective these costs will no longer be charged by Westfield to OneMarket. OneMarket will operate as a standalone business and is expected to incur corporate overheads and listed entity expenses (refer to section 4.13) that will replace the corporate overheads noted in the table above. Also included above is the deferred employee costs related to the Westfield stock awards as allocated to OneMarket as described in the basis of preparation. Upon the Demerger becoming Effective these awards will be settled by Westfield and no further awards from Westfield will be provided. Details of the employee compensation plan after the demerger are included in section 4.12(d). Management discussion and analysis OneMarket’s strategy is to develop a retail technology network that seeks to help bricks-and-mortar retailers compete more effectively in the evolving retail environment. OneMarket plans to do this by using its proposed network to develop product solutions which bring together retailers, shopping venues, brands and technology companies. OneMarket is an early stage start-up so there is minimal revenue from operations and costs incurred to date have been expensed in accordance with the accounting policies summarised in section 5.7 below. FY17 compared to FY16 The operating loss before impairment of assets, fair value of investments, capital transaction costs and tax increased $33,709,000 from $40,024,000 for FY16 to $73,733,000 for FY17. The increase is primarily due to an increase employee benefit expense (which increased $26,236,000 from $19,680,000 in FY16 to $45,916,000 in FY17) and the amortisation of deferred employee costs (which increased $2,393,000 from $1,220,000 in FY16 to $3,613,000 in FY17). These increases are driven by an increase in the engineering effort to build the OneMarket platform, the acquisitions of 12 Digit, Yocuda and FluidM, and an increase in sales and back office overhead personnel. Administration and other expenses increased $5,201,000 from $10,897,000 in FY16 to $16,098,000 in FY17 due to an increase in facilities costs and back office functions to support the increased headcount related to the development of OneMarket’s technology platform. Corporate Overheads increased by $2,159,000 from $7,604,000 in FY16 to $9,763,000 in FY17 due to an increase in allocation of costs based on the pro rata spend on OneMarket products compared to the Westfield products. Impairment of assets was $56,987,000 in FY17 (nil in FY16) due to the write-down of goodwill related to the acquisition of businesses to fair value based on expected future cash flows. Fair value write down of investments was $1,256,000 in FY17 ($3,333,000 in FY16) due to a lower decrease in fair market value of unlisted equity investments. Capital transaction costs were $1,382,000 in FY17 (nil in FY16) due to the acquisitions of 12 Digit, Yocuda and FluidM. FY16 compared to FY15 The operating loss before impairment charges, fair value of investments, capital transaction costs and tax increased $35,211,000 from $4,813,000 for FY15 to $40,024,000 for FY16. The increase is due to an increase in employee benefit expense, amortisation of deferred employee costs, administrative and other expenses and corporate overheads due to an increase in headcount in order to further develop the OneMarket platform. Fair value write down of investments was $3,333,000 in FY16 ($1,768,000 in FY15) due to a decrease in fair market value of unlisted equity investments.
WESTFIELD CORPORATION PROPOSAL // PAGE 67 SECTION 5 FINANCIAL INFORMATION ON ONEMARKET
(b) Historical Cash Flows Table 5.3.2 Historical Cash Flows for FY17, FY16 and FY15 for OneMarket. Historical Cash Flows US $’000 FY17 FY16 FY15
Net Loss After Tax (133,358) (43,357) (6,581) Amortisation and depreciation 502 623 592 Deferred employee costs 3,613 1,220 124 Impairment of assets 56,987 – – Fair value write down of investments 1,256 3,333 1,768 Capital transaction costs 1,382 – – Cash settlement of deferred employee costs (278) (1,042) (64) Other non cash expenses 1,962 – – Net cash flows used in operating activities (67,934) (39,223) (4,161) Acquisition of intangibles and investments (54,485) (1,600) (5,101) Acquisition of property, plant and equipment (2,200) (232) (180) Net cash flows used in investing activities (56,685) (1,832) (5,281) Proceeds from equity injections from parent 321,619 41,055 9,442 Net cash flows from financing activities 321,619 41,055 9,442 Net increase in cash 197,000 – –
Cash at 31 December 2017 197,000 – –
OneMarket has historically been funded by Westfield. At 31 December 2017 a net contribution of $197.0 million of cash was assigned to OneMarket from Westfield to fund the business in the medium term (refer to section 3.2). Details as to future funding are included in section 4.9 and section 5.8. The above Historical Cashflows represent 100% of OneMarket. If the Demerger proceeds Westfield will retain 10% of OneMarket. FY17 compared to FY16 The net cash outflow used in operating activities has increased $28,711,000 from $39,223,000 in FY16 to $67,934,000 in FY17 primarily due to the increase in employment costs to develop OneMarket’s technology platform. Net cash flows used in investment activities increased $54,853,000 from $1,832,000 in FY16 to $56,685,000 in FY17 due to the acquisition of 12 Digit, Yocuda and FluidM discussed above and acquisitions of property, plant and equipment during the year. FY16 compared to FY15 The net cash outflow used in operating activities has increased $35,062,000 from $4,161,000 in FY15 to $39,223,000 in FY16 primarily due to the increase in employment costs to develop the OneMarket platform subsequent to the initial launch of OneMarket in 2015. Net cash flows used in investment activities decreased $3,449,000 from $5,281,000 in FY15 to $1,832,000 in FY16 due to a reduction in the cost of investments acquired in FY16.
PAGE 68 // WESTFIELD CORPORATION PROPOSAL (c) Historical and Pro Forma Historical Statements of Financial Position The table below sets out the pro forma adjustments that have been made to the Historical Statement of Financial Position of OneMarket as at 31 December 2017 in order to prepare the Pro Forma Historical Statement of Financial Position for the OneMarket Group. The Pro Forma Historical Statement of Financial Position represents OneMarket Group’s financial position as if the Restructure steps as described in section 3.2 and the Demerger had occurred as at 31 December 2017. Table 5.3.3 Historical and Pro Forma Historical Statements of Financial Position as at 31 December 2017 Historical and Pro Forma Historical Statement of Financial Position US $’000 Pro Forma Historical Pro Forma OneMarket As at 31 December 2017 Historical adjustments Group Cash and cash equivalents 197,000 (1) – 197,000 Total current assets 197,000 – 197,000 Property, plant and equipment 2,228 – 2,228 Unlisted investments 344 – 344 Total non-current assets 2,572 – 2,572 Total assets 199,572 – 199,572 Trade and other payables – 2,500 (2) 2,500 Employee benefits 6,619 (6,619) (3) – Contingent consideration 1,210 – 1,210 Total current liabilities 7,829 (4,119) 3,710 Contingent and deferred consideration 4,169 – 4,169 Total non-current liabilities 4,169 – 4,169 Total liabilities 11,998 (4,119) 7,879 Net assets 187,574 4,119 191,693 Equity attributable to external non controlling interests – 19,169 19,169 (4) Invested capital/shareholders funds attributable to members of OneMarket Limited 187,574 (15,050)(4) 172,524 Invested capital/equity 187,574 4,119 191,693
(1) OneMarket has historically been funded by Westfield. At 31 December 2017 a net contribution of $197.0 million of cash was made to OneMarket from Westfield to fund OneMarket’s business in the medium term (refer section 3.2). Details as to future funding are included in section 4.9 and section 5.8. (2) Transaction costs from the Demerger attributable to OneMarket are expected to be approximately $2,500,000 of professional fees (legal, accounting and tax) and advisory fees. (3) The provision for employee stock awards will be settled by Westfield on the Demerger of OneMarket. (4) Upon the Demerger, 10% of the economic interest in OneMarket is retained by Westfield.
5.4 Liquidity and capital resources Following the Effective Date, OneMarket’s principal sources of funds is cash and cash equivalents and revenue generated from operations. OneMarket did not have any bank loans outstanding as of 31 December 2017. OneMarket will deploy cash to fund its technology and platform development, including but not limited to, technology development and growth in employee headcount, as well as to fund sales and marketing activities. OneMarket expects that it will have sufficient cash flow from operations to meet its operational requirements and business needs until late 2019. Further details of funding sources are included in section 4.9 and section 5.8. OneMarket’s ability to generate sufficient cash depends on its future performance which, to a certain extent, is subject to a number of factors beyond its control including general economic, financial and competitive conditions.
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5.5 Contractual obligations and commitments (c) Yocuda contingent consideration The table below sets out a summary of OneMarket’s The terms of the acquisition of Yocuda included $1.2 contractual obligations and commitments as at million of contingent consideration and other employee 31 December 2017. compensation commitments related to two key employees of Yocuda who held stock or options in Yocuda and Less than More than who are current employees of OneMarket. Under IFRS US $’000 1 year 1-5 years 5 years this contingent consideration is not an acquisition cost Operating lease but treated as an employee benefit. The contingent commitments 2,156 2,336 – consideration payments are made pending continuous service of the employee. 5.6 Contingent consideration 5.7 Significant accounting policies OneMarket has certain contingent purchase price obligations connected with its acquisitions of 12 Digit, Yocuda and Business combinations FluidM. This contingent consideration is measured at fair The assets and liabilities of businesses acquired are value at the date of acquisition and reassessed at the end measured at fair value. Any consideration in excess of the of each reporting period in accordance with OneMarket’s fair value of the assets and liabilities is initially recognised significant accounting policies summarised in section 5.7. as goodwill. Goodwill is tested for impairment at year end. A summary of the terms of the contingent consideration If the valuation of the goodwill is less than the carrying value is as follows: then an impairment charge is recognised in the statement of financial performance. The valuation of the goodwill is (a) 12 Digit contingent consideration based on an internal valuation of the business. This internal At 31 December 2017, the fair value of the contingent valuation is based on the net present value of the cash flows consideration in respect of the 12 Digit acquisition was expected from the business over the medium term. estimated to be $9.4 million of which 31% or $2.9 million Contingent consideration has been provided for as an acquisition cost. The remaining 69% is payable to employees of OneMarket and in On acquisition of a business any contingent consideration accordance with IFRS are treated as an employment cost is recognised at fair value and this fair value is reassessed at and expensed in the year as service is performed and as balance date which reference to the terms of the contingent progress towards performance hurdles takes place. consideration eg. performance hurdles. Under the terms of the 12 Digit Acquisition Agreement, Investments the former stockholders of 12 Digit and certain former Investments are initially recorded at cost and measured at employees of 12 Digit have the right to receive contingent fair value. The fair value is based on an internal valuation consideration of up to $85 million if certain financial targets which is supported by financial information of the investee. are achieved. The amount of contingent consideration If the internal valuation does not support the value of the payable, if any, is to be calculated annually at the end of investment an impairment charge is recognised. each of the calendar years 2017 to 2020 based on gross revenue (for 2017) and after tax profit (for 2018, 2019 and Property Plant and equipment 2020) of the 12 Digit business, as defined and calculated Property, plant and equipment is measured at cost and for purposes of the 12 Digit Acquisition Agreement. Under depreciated over 1-5 years. If the valuation of the business no circumstances can the aggregate additional contingent does not support the net book value of the property, plant consideration payable pursuant to the 12 Digit Acquisition and equipment then an impairment charge is recognised. Agreement exceed $85 million. Employee benefits Refer to section 8.8 for details of a process that has commenced in relation to the calculation of contingent Employee benefits include salaries and wages, temporary consideration payable by OneMarket in relation to the labour, bonuses, the amortisation of stock awards and acquisition of 12 Digit. related employee on costs such as insurance and leave entitlements. These costs are expensed in the period that (b) FluidM contingent consideration the services were performed. The amortisation of stock At the date of acquisition of FluidM $1.0 million was awards relating to employee benefits included for FY17 provided for as the contingent consideration. Contingent noted above will be settled by Westfield on implementation consideration payments are made pending the successful of the demerger. completion of certain operational milestones. The first milestone payment of $0.5 million was made in September, 2017 and the second $0.5 million milestone payment is due in January 2019.
PAGE 70 // WESTFIELD CORPORATION PROPOSAL 5.8 Cash requirements 5.9 Dividend policy On 28 February 2018, the OneMarket Group had cash and The policy of OneMarket will be to reinvest all cash flows in cash equivalents of approximately $185.7 million. On the order to maximise its growth. Accordingly, no dividends are Demerger Implementation Date (expected to be around expected to be paid in the near-term following OneMarket 31 May 2018), OneMarket anticipates it will have cash and Limited’s listing on the ASX. cash equivalents of approximately $160 million. Having The payment of a dividend by OneMarket Limited, if any, considered its current business plan and related cash needs, is at the discretion of the OneMarket Directors and will OneMarket believes that its cash and cash equivalents, after be a function of a number of factors (many of which are taking into account the cashflow outcome from operations, outside the control of the OneMarket Directors), including initial set-up costs for corporate functions (and including an the general business environment, the operating results, allowance for potential closure costs were that to occur), cash flows and the financial condition of OneMarket Limited, will be sufficient to meet its anticipated cash needs until late future funding requirements, capital management initiatives, 2019. For the purposes of this estimate, OneMarket has taxation considerations (including the level of franking credits assumed no revenue is earned from its operations. available), any contractual, legal or regulatory restrictions OneMarket’s ongoing cash position will depend on many on the payment of dividends by OneMarket Limited, and factors, including its cash generated or sourced, its growth any other factors the OneMarket Directors may consider rate, the timing and extent of the introduction of new and relevant. The OneMarket Directors do not provide any enhanced product and service offerings and spending to assurance of the future level of dividends to be paid by support development efforts and any proposed acquisitions. OneMarket Limited. OneMarket estimates that on average, it will spend approximately $6.9 million of cash per month excluding the initial set-up and closure costs. Actual amounts may vary between months due to the uneven nature of certain cash expenditures such as annual pre-paid service contracts and staff bonuses. In addition, actual amounts may vary as OneMarket further develops its business strategy. The expenses are expected to be incurred regardless of the level of revenue generation. Essentially all of the expected cash expenditures will be incurred to further develop the OneMarket network and related products, as well as sales, general and administrative efforts. Such monthly cash expenditures are expected to consist of the following: Expenditure Amount ($) Salaries and wages 3.6 Employee benefits 0.6 Contract labour 0.8 Technology contracts 0.6 Legal and other professional services 0.2 Rent and other facilities costs 0.4 Other general and administrative costs 0.4 Marketing 0.1 Public listing costs 0.2 Total 6.9
Unexpected cash obligations may arise as OneMarket pursues its business strategy over the medium term.
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This section contains information on the risks relating to OneMarket’s business, an investment in OneMarket and the Demerger 6.1 Introduction Directors and the OneMarket senior management team. If the Demerger proceeds, Westfield Shareholders, who You should carefully consider the risks and uncertainties previously had an indirect interest in OneMarket’s business, described below, together with all other information in this will have a direct interest in OneMarket Limited and, Demerger Booklet, including section 5 and OneMarket’s accordingly, will be directly subject to a number of risks special purpose financial statements, before making a affecting OneMarket, its business, its operations and its decision to vote in favour of the Demerger. OneMarket’s financial condition. Westfield Shareholders should carefully business, financial condition, results of operations or consider the risks and uncertainties associated with prospects could also be harmed by risks and uncertainties OneMarket Shares, OneMarket’s business and the industry that are not presently known to OneMarket or that in which it operates together with all of the other information OneMarket currently believes are not material. If any of in this Demerger Booklet before making any decision as to the risks actually occur, OneMarket’s business, financial whether or not to vote in favour of the Resolutions to be condition, results of operations and prospects could be considered at the Meetings. materially and adversely affected. This section describes the risk factors which may be relevant If you do not understand any part of this Demerger Booklet to your decision whether to vote in favour of the Demerger or are in any doubt as to how to vote in relation to the Scheme and the related Capital Reduction. These risks Demerger, it is recommended that you consult your legal, include those that: financial or other professional adviser before deciding how to vote. —— relate to OneMarket’s business; —— are specific to an investment in OneMarket; and 6.2 Risks related to OneMarket’s business —— relate to the Demerger. (a) OneMarket is an early-stage company with a limited The selection of risks has been based on an assessment operating history and a business strategy that is of a combination of the probability of the risk occurring and in an early stage of implementation, which makes impact of the risk if it did occur. The assessment is based it difficult to evaluate OneMarket’s business and on the knowledge of the Westfield Directors as at the date future prospects. of this Demerger Booklet, but there is no guarantee or OneMarket is an early stage company and has a limited assurance that the importance of different risks will not operating history for its services and products on which change or other risks will not emerge. to evaluate its business and prospects. OneMarket was Although Westfield Shareholders will not be required to formed by Westfield in October 2012 as Westfield Labs make any financial contribution to receive OneMarket to understand challenges that shoppers experience within Shares pursuant to the Demerger, investing in OneMarket Westfield shopping venues and to use digital technology Shares involves a high degree of risk. OneMarket is an early to address those issues. It was not until January 2017 stage technology start-up company and faces significant that Westfield Retail Solutions (which was rebranded in challenges in becoming a viable and profitable company. November 2017 to OneMarket) shifted its strategy to focus This section does not purport to list every risk that may be on building a network of retailers, shopping venues, brands associated with an investment in OneMarket Shares now and technology companies. Currently, only one retailer and or in the future, and the occurrence of consequences of some of the risks described in this section are partially or completely outside the control of OneMarket, the OneMarket
PAGE 72 // WESTFIELD CORPORATION PROPOSAL two shopping venues have signed agreements to participate (b) Failure to retain existing network participants, quickly in the network. The success of the network, and thus attract new network participants and sell additional the success of OneMarket’s business, is predicated on a products to network participants could adversely substantial number of retailers, shopping venues, brands affect OneMarket’s business. and technology companies participating in the network. OneMarket’s business depends on its ability to attract OneMarket cannot assure you that sufficient participants network participants, including retailers, shopping venues will join the network for it to be successful. and brands, and other network participants, and have To achieve OneMarket’s strategy for its network, consumers them deploy OneMarket’s products. OneMarket’s current must also engage in the network platform, initially via products are at an early stage and are precursors to OneMarket’s Live Receipts or Intelligent Parking Technology the enhanced versions and other products are still in products or other products that are still under development. development. As such its future success is modelled on OneMarket only recently began offering its Live Receipts acquiring a significant amount of new network participants and Intelligent Parking Technology products to consumers. and accelerating development and deployment of new OneMarket cannot assure you that consumers will engage products. If OneMarket doesn’t achieve its expected goals in the platform in a manner sufficiently meaningful to create for its network and products, its business and financial a compelling business proposition for retailers, shopping performance will be adversely affected. venues, brands and technology companies. If the business The success of OneMarket’s business strategy is in part proposition is not sufficiently compelling, prospective based on an ability to develop momentum by being the network participants may not join the network, and existing first retail network of its type through quickly attracting participants may leave the network or not deploy OneMarket and retaining a large number of network participants. If products, any of which could have a material adverse effect OneMarket is unable to develop momentum in this way on OneMarket’s business and prospects. that may negatively impact its business strategy and its OneMarket expects the majority of its 2018 revenue will ability to develop a viable business. be derived from products it has acquired through its past OneMarket’s ability to retain existing and attract new acquisitions, including its Shopper Exchange product. network participants, network participants’ level of usage These products are not core to the retail technology network of the network and OneMarket’s products and OneMarket’s strategy. OneMarket cannot assure you that it will be able to ability to sell its enhanced versions of its products and new implement its strategy for monetising its acquired products. products, depends on many factors including the adequacy As a result of OneMarket’s limited operating history, evolving of OneMarket’s products with respect to matters such as business model, and the unpredictability of future general functionality, reliability, cost-effectiveness, pricing, client economic and retail industry conditions, OneMarket’s ability support and value, and prospective participants’ acceptance to plan for and model future growth is limited and subject to of their respective obligation to provide their data to a number of uncertainties. OneMarket’s current operating the network. model and strategy has changed and may require further A failure by OneMarket to retain and attract network changes in order for it to achieve profitability and scale its participants and a failure by network participants to adopt operations efficiently. For example, OneMarket may need and deploy OneMarket’s products would have a material to implement changes in its sales model or make changes adverse impact on OneMarket’s business, operations, to its platform. If it fails to implement these changes on a financial performance and prospects. timely basis or is unable to implement them due to factors beyond its control, its business may suffer. There can be (c) If OneMarket fails to continue to develop new no assurance that OneMarket will be able to generate or products and provide innovative solutions, release increase revenues from its current strategy or avoid losses products on its proposed timeline, maintain a certain in any future period. You should consider OneMarket’s level of client and consumer support or execute on its business and prospects in light of the risks and difficulties business strategy and vision its brand and reputation it will face as an early-stage company. could be harmed. The retention and growth by OneMarket of its client base will be dependent on continued product development and innovation, release of products in development in a timely manner and execution of its business strategy and vision. Building its brand and reputation among its existing and potential clients will depend largely on its ability to provide its clients with better and more innovative products, including valued-shopper insights and data and the ability for its clients to have high quality consumer engagements. Delay in the introduction of such products
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may adversely impact OneMarket’s brand and reputation. Errors, failures, vulnerabilities or bugs may occur in In addition, consumer complaints or negative publicity about OneMarket’s products, especially when updates are OneMarket’s products or services, especially on social deployed or new products are rolled out. OneMarket’s media platforms, could harm OneMarket’s or its clients’ network is expected to be often used in connection with reputation and diminish client use of OneMarket’s network large-scale computing environments with different operating and products, the trust clients place in OneMarket and client systems, system management software, equipment and confidence in the business case for network participation. networking configurations, which may cause errors or To remain competitive, OneMarket must continue to develop failures of products, or other aspects of the computing new products, applications and enhancements to its existing environment into which OneMarket’s products are deployed. products and the network. Maintaining adequate research In addition, deployment of OneMarket’s products into and development resources, such as the appropriate complicated, large-scale computing environments may personnel and development technology, to meet the expose errors, failures, vulnerabilities or bugs in its products. demands of the market is essential. If OneMarket is unable Any such errors, failures, vulnerabilities or bugs may not be to develop products internally due to certain constraints, found until after they are deployed to OneMarket’s clients. such as high employee turnover, lack of management ability Real or perceived errors, failures, vulnerabilities or bugs in or a lack of other research and development resources, this OneMarket’s products could result in negative publicity, may force it to expand into a certain market or strategy via loss or corruption of client data, unauthorized access to an acquisition for which OneMarket could potentially pay too or use of client data, loss of or delay in market acceptance much or fail to successfully integrate into its operations. of OneMarket’s products, loss of competitive position, or claims by clients for losses sustained by them, all of which OneMarket’s brand will depend in part on effective client could harm OneMarket’s business, results of operations, support, which may require increased investment in, and financial condition and prospects. training of, support personnel. Failure to provide effective and timely client support could negatively affect OneMarket’s (e) OneMarket may not be able to achieve or sustain reputation among its clients and adversely affect its business revenue growth, and as OneMarket’s costs increase, and prospects. OneMarket may not be able to generate sufficient Potential clients may have made significant investments revenue to achieve and maintain profitability over in existing systems and may be unwilling to invest in the long term. new products and services. In addition, resistance from OneMarket has generated limited revenue to date. In consumer and privacy groups to increased commercial future periods, OneMarket may not be able to achieve or collection and use of data on spending patterns and sustain revenue growth. Revenue growth will depend on a other personal behaviour and governmental restrictions number of factors, including, but not limited to, OneMarket’s on the collection and use of personal data may impair ability to: the further growth of this market by reducing the value of —— attract new clients, successfully deploy and implement data to organisations, as may other developments. If the its network, increase its clients’ use of its network and market fails to grow or grows more slowly than OneMarket provide its clients with excellent customer support; currently expects or businesses do not buy its products and —— price its products effectively so that it is able to attract participate in its network, OneMarket’s business, operating and retain clients without compromising profitability; results, financial condition and prospects will be adversely affected. —— increase its monetisation of its products; and —— successfully compete against larger companies and (d) OneMarket’s network and related products new market entrants. have recently been developed or are still under development. As such, they remain relatively If OneMarket is unable to accomplish any of these tasks, untested. its ability to grow its revenue will be negatively affected. To develop a viable network OneMarket needs to quickly OneMarket is in the process of developing its platform attract and retain a number of network participants. In underlying the network and has recently begun to offer doing so OneMarket may be forced to offer pricing that may the products intended to be offered in the initial phases be insufficient to achieve profitable financial performance. of the network. As such, the operability of the technology Demand for OneMarket’s products is expected to be underlying the network and its initial products are relatively sensitive to price. OneMarket intends to charge clients a untested at scale in a commercial setting. OneMarket’s fee to access OneMarket’s network and use its products. network and products may encounter technical challenges OneMarket has limited experience with respect to as they start to be offered to network participants and determining the optimal fees for OneMarket’s products. consumers. If the platform underlying the network or Many factors, including the need to acquire key clients and any recently launched or future products do not work as OneMarket’s marketing, client acquisition and technology anticipated when implemented at scale in a commercial costs, can significantly affect OneMarket’s pricing strategies. setting, OneMarket’s business and prospects could be materially harmed.
PAGE 74 // WESTFIELD CORPORATION PROPOSAL There can be no assurance that OneMarket will not be Furthermore, if OM Delaware raises capital through one or forced to engage in aggressive pricing initiatives or to more debt financings, the debt holders would have priority increase OneMarket’s marketing and other expenses to over the holders of common stock, including OneMarket attract and retain clients. Limited, in a liquidation of OM Delaware. In addition, OM OneMarket also expects its operating expenses to increase Delaware may be required to accept terms that restrict in future periods. OneMarket’s strategy involves the its ability to incur additional indebtedness, as well as be introduction of new product offerings and the expansion required to take other actions that would be in the interests into other markets. OneMarket may need to invest more on of the debt holders, including maintaining specified liquidity these matters than anticipated due to competitor activity, or other ratios, any of which could harm its business, results technological advances, regulatory changes or other of operations, financial condition and prospects. factors. There is a risk that these strategies may result in As noted in section 4.9 OneMarket may seek to introduce unforeseen costs or risks, or may not deliver the outcomes investors for strategic reasons to advance its business intended. If OneMarket’s revenue growth does not increase strategy, including network participants. The introduction to offset these anticipated increases in operating expenses, of strategic investors may also have the effect of diluting OneMarket may not be able to achieve or maintain the interests of OneMarket Shareholders. profitability. OneMarket may not be able to obtain additional debt or (f) Investors in OneMarket Limited may have their equity financing on favourable terms when required, or at investment in OneMarket diluted through the all. If OneMarket needs additional capital and cannot raise it introduction of new investors. OneMarket may not on acceptable terms, or at all, it may not be able to, among be able to raise additional capital on acceptable other things: terms or at all. —— continue to develop and enhance its network and OneMarket believes that its cash and cash equivalents will products; be sufficient to meet its anticipated cash needs until late —— continue to expand its product development, sales and 2019. Prior to this time it is likely that OneMarket will need marketing organisations; to raise additional funding to advance its business plan, —— hire, train and retain employees; develop new products or enhance its existing products, —— respond to competitive pressures or unanticipated continue to develop and enhance its network, enhance working capital requirements; or its operating infrastructure and acquire complementary businesses and technologies. —— pursue acquisition opportunities. If equity is raised by OneMarket that equity capital could be OneMarket can be expected to have ongoing monthly cash raised through OneMarket Limited or through OM Delaware. commitments that exceed the cash revenue it receives for It is currently anticipated to be more likely that equity the foreseeable future. If its cash commitments exceed its would be raised at the OM Delaware level. This is because cash revenue and it does not have sufficient cash resources OneMarket expects that new investors are likely to be United available to it, it may not be able to continue as a going States based or based outside Australia. It can be expected concern and may face insolvency. that investors of this kind would prefer a direct investment (g) If OneMarket experiences any data loss, data into the US holding company despite the reduced liquidity corruption or data security breaches, its business associated with an investment in such entity compared to could be adversely affected. an investment in OneMarket Limited. OneMarket intends to provide its products through its Funds raised through OneMarket Limited could be in the technology platform. OneMarket products involve the form of equity or debt, including equity raised through private storage and transmission of its clients’ confidential and placements or through entitlement offerings to OneMarket proprietary information, including confidential business Shareholders. information, information regarding their customers, and Funds raised through OM Delaware could be in the form other confidential information. Additionally, OneMarket and of a variety of equity or debt instruments. its service providers maintain OneMarket’s own sensitive If OM Delaware raises equity financing, OneMarket Limited and confidential information. may experience significant dilution of its ownership interest Cyber-attacks or exploitation of some unidentified if it does not exercise its right to maintain its ownership as vulnerability in OneMarket’s network, including in the set out in the Investors’ Rights Agreement (as described in underlying platform or systems of OneMarket or its service section 8.7(a)). In addition, the terms of the securities issued providers, could lead to loss, theft or corruption of data. in the equity financing could include priority in the event of an acquisition or liquidation of OM Delaware, preferential dividend rights, price-based anti-dilution rights, veto rights or other terms that could adversely affect the value of OM Delaware’s common stock and potentially the value of OneMarket Shares.
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This could render OneMarket’s network unavailable for a (h) The market for technology solutions in the retail period of time while data is restored and adversely affect sector is highly competitive, competitors may develop OneMarket’s relationship with its clients. OneMarket’s similar products and may have greater resources business could be materially impacted by any actual or and if OneMarket does not compete effectively its perceived security incidents impacting its clients’ data business could be adversely affected. and information, including by unauthorised access, theft, The market for technology solutions in the retail sector is destruction, loss of information or misappropriation or highly competitive. OneMarket competes with companies release of confidential customer data. that aim to solve a single retailer issue and connected Cyber-attacks and other malicious Internet-based activities commerce platforms that have retailers plug into continue to increase generally. Because the techniques infrastructure. OneMarket believes its ability to compete used to obtain unauthorized access to or sabotage systems depends on many factors within and beyond its control, change frequently and generally are not identified until they including: are launched against a target, OneMarket and its service —— attracting new clients and engaging with existing providers may be unable to anticipate these techniques clients; or to implement adequate preventative measures. There —— prospective clients’ belief that the network will provide is a risk that the measures OneMarket and its service a valuable benefit; providers take may not be sufficient to detect or prevent unauthorised access to, or disclosure of, its, its clients’ or —— the loyalty of and OneMarket’s relationship with its its clients’ customers’ confidential or proprietary information clients and such clients’ willingness to share data and (including information relating to OneMarket employees and other information with OneMarket; contractors), and any of these events may cause disruption —— the scope, features and price of OneMarket’s product to its business and operations. offerings; and OneMarket could suffer damage to its brand and reputation —— the level of product innovation. if a cyber-attack or other security incident were to allow There is a risk that existing or new competitors could unauthorized access to or modification of its clients’ data, compete more effectively and gain market share through other external data, or its own data or its platform or product innovation, price discounting or aggressive systems, or if the services OneMarket provides to clients marketing campaigns. Competition may also come from were disrupted, or if OneMarket’s platform or services were providers of complementary products or services offering perceived as having security vulnerabilities. products similar to those of OneMarket, as well as from In addition, any actual or perceived data security incident proprietary products and services developed internally by may require OneMarket to expend capital and other existing and prospective clients. In addition, OneMarket resources to alleviate the problem, and could expose could lose clients and its prospects for obtaining additional OneMarket to legal claims by clients and others, termination clients could be materially impaired if it fails to adapt to of contracts, regulatory scrutiny, investigations, claims technological and regulatory changes or client expectations and fines, any of which could materially adversely impact at the same rate as its competitors. OneMarket’s business, financial results and prospects. Some of OneMarket’s current competitors have, and Although OneMarket has strategies and protections in potential competitors may have, longer operating histories, place to minimise security breaches and to protect data, greater financial, technical, research and development, these strategies might not be successful. OneMarket also sales and marketing, and other resources, and greater cannot assure you that any limitations of liability provisions name recognition. These factors may allow its competitors in its contracts would be enforceable or adequate or would to derive greater revenue and profits from their existing otherwise protect OneMarket from any liabilities or damages client bases, acquire clients at lower costs or respond with respect to any particular claim relating to a security more quickly than OneMarket can to new or emerging lapse or breach or other security-related matter. technologies and changes in technology for the retail sector. These competitors may engage in more extensive research and development efforts, enter or expand their presence in the retail sector, undertake more far-reaching marketing campaigns, and adopt more aggressive pricing policies, which may allow them to build larger client bases or generate revenue from their existing client bases. If OneMarket fails to execute on any of the above better than its competitors, its operating results may be adversely affected.
PAGE 76 // WESTFIELD CORPORATION PROPOSAL Further, many of OneMarket’s competitors expend a OneMarket is subject to certain contractual obligations considerably greater amount of funds on their respective regarding the collection, use, storage, transfer, disclosure research and development programs, and those that do and/or processing of information. not may be acquired by larger companies that would Although OneMarket is working to comply with those allocate greater resources to OneMarket’s competitors’ federal, state and foreign laws and regulations, industry research and development programs. OneMarket’s failure to standards, contractual obligations and other legal obligations maintain adequate research and development resources or that apply to it, those laws, regulations, standards and to compete effectively with the research and development obligations are evolving and may be modified, interpreted programs of its competitors would give an advantage to and applied in an inconsistent manner from one jurisdiction such competitors and may harm OneMarket’s business, to another and may conflict with one another, other results of operations, financial condition and prospects. requirements or legal obligations, its practices or the features (i) If there is a decline in the retail industry due of OneMarket’s network. to increased competition from online retailers, Any failure or perceived failure by OneMarket to comply economic downturns, or other factors, causing client with federal, state or foreign laws or regulations, industry reductions in technology investment or discretionary standards, contractual obligations or other legal obligations, spending, demand for OneMarket’s products and or any actual or suspected security incident, whether or not access to its network may decline and its revenue, resulting in unauthorised access to, or acquisition, release results of operations and cash flows could be or transfer of personal information or other data, may result adversely affected. in governmental enforcement actions and prosecutions, OneMarket currently provides products for participants private litigation, fines and penalties or adverse publicity and in the retail industry. Therefore, the volume and growth of could cause OneMarket’s clients to lose trust in it, which OneMarket’s clients is linked to the size and growth of the would have an adverse effect on OneMarket’s reputation retail industry. and business. Any inability to adequately address privacy and security concerns, even if unfounded, or comply with There is a risk that the retail industry may not grow as applicable laws, regulations, policies, industry standards, anticipated or may decline, for example due to competition contractual obligations, or other legal obligations could result from online retailers, changes in consumer sentiment, in cost and liability to OneMarket, damage its reputation, changes in regulation, or a downturn in the global economy. inhibit sales, and adversely affect its business. Certain bricks-and-mortar retailers have experienced and may continue to experience competition from alternative OneMarket also expects that there will continue to be new retail models, including from online retailers and other proposed laws, regulations, self-regulatory obligations and forms of pressure on their business models. In addition, industry standards concerning privacy, data protection and such factors could cause existing and prospective clients information security in the United States, the European to reduce their technology investment and discretionary Union and other relevant jurisdictions and OneMarket cannot spending. A number of significant global bricks-and- yet determine the impact such future laws, regulations, mortar retailers have suffered, and may continue to suffer, obligations and standards may have on its business. Future substantial deterioration in their financial performance and, laws, regulations, standards, self-regulatory obligations in the case of listed retailers, their market capitalisation. The and other obligations, and changes in the interpretation of bankruptcy or insolvency or a material downturn in business existing laws, regulations, standards and other obligations, of bricks-and-mortar retailers may negatively impact on their could impair OneMarket’s or its clients’ ability to collect, use use of OneMarket’s products. or disclose information relating to consumers, which could decrease demand for OneMarket’s solutions, increase its This could have a material adverse impact on OneMarket’s costs and impair its ability to maintain and grow its client business, operations, financial performance and prospects. base and increase its revenue. New laws, amendments to (j) Regulatory impediments to OneMarket developing or re-interpretations of existing laws and regulations, industry its network and products, particularly in the areas standards, contractual obligations, self-regulatory obligations of privacy and use of data, may adversely impact and other obligations may require OneMarket to incur its business. additional costs and restrict its business operations. Such Many jurisdictions have enacted or are considering enacting laws and regulations may require companies to implement privacy and/or data security legislation, including laws and privacy and security policies, permit users to access, regulations applying to the collection, use, storage, transfer, correct and delete information stored or maintained by such disclosure and/or processing of information relating to companies, inform individuals of security breaches that individuals. The costs of compliance with, and other burdens affect their personal information, and, in some cases, obtain imposed by, such laws and regulations that are applicable individuals’ consent to use or disclose personal information to OneMarket’s businesses and those of its clients may limit for certain purposes. If OneMarket fails to comply with any the use and adoption of OneMarket’s network and products federal, state and foreign laws or regulations its ability to and reduce overall demand for it. These privacy and data successfully operate its business and pursue its business security related laws and regulations are evolving and goals is likely to be negatively affected. may result in increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions. In addition,
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Evolving and changing definitions of what constitutes of personally identifiable data that is subject to the Directive, “personal information’’ and “personal data” within the or personal data, to third countries, such as the United European Union, the United States and elsewhere, especially States, that have not been found to provide adequate relating to classification of IP addresses, machine or device protection to such personal data. OneMarket clients have in identification numbers, location data and other information, the past relied upon its adherence to the U.S. Department of and evolving and changing requirements relating to the Commerce’s Safe Harbor Privacy Principles and compliance processing of various types of information, may limit or with the U.S.-EU and U.S.-Swiss Safe Harbor Frameworks inhibit OneMarket’s ability to operate or expand its business, as agreed to and set forth by the U.S. Department of including limiting potential technology alliance partners that Commerce, and the European Union and Switzerland, may involve the sharing of data. which established a means for legitimating the transfer of Around the world, there are numerous lawsuits in process personal data by data controllers in the European Economic against technology companies that process personal Area (EEA), to the United States. In 2015, the Court of information. If one or more of those lawsuits is successful, Justice for the European Union held in Case C-362/14 it could increase the likelihood that OneMarket may be (Schrems v. Data Protection Commissioner) that the U.S.- exposed to liability for its own policies and practices EU Safe Harbor Framework was no longer a valid method concerning the processing of information. The costs of of compliance with requirements set forth In the Directive compliance with, and other burdens imposed by laws, (and member states’ implementations thereof) regarding the regulations and policies concerning privacy and data transfer of personal data outside of the EEA. security that are applicable to the businesses of OneMarket’s The European Union and United States agreed in 2016 on a clients also may limit the use and adoption of its network successor to the Safe Harbor framework, the EU-US Privacy and reduce overall demand for it. Privacy or data security Shield. The EU-U.S. Privacy Shield has been challenged by concerns, whether or not valid, may inhibit market adoption private parties, however, and may face additional challenges of OneMarket’s network. Additionally, concerns about by national regulators or private parties. Until remaining legal data security or privacy may result in the adoption of new uncertainties regarding the future of the EU-U.S. Privacy legislation that restricts the implementation of technologies Shield are settled and OneMarket determines whether it will like OneMarket’s or requires it to make modifications to participate in the program, it will continue to face uncertainty its network, which could significantly limit the adoption as to whether its efforts to comply with its obligations under and deployment of OneMarket’s technologies or result European privacy laws will be sufficient. If OneMarket is in significant expense to modify its network. investigated by a European data protection authority, it may If OneMarket’s network is perceived to cause, or is otherwise face fines and other penalties. Any such investigation or unfavourably associated with, violations of privacy or data charges by European data protection authorities could have security requirements, it may subject OneMarket or its clients a negative effect on OneMarket’s existing business and on to public criticism and potential legal liability. Existing and its ability to attract and retain new clients. potential privacy laws and regulations concerning privacy OneMarket may also experience hesitancy, reluctance, and data security and increasing sensitivity of consumers or refusal by European or multi-national clients to use its to unauthorised processing of information may create services due to the potential risk exposure to such clients negative public reactions to technologies, products and as a result of the ECJ ruling in Case C-362/14 and the services such as OneMarket’s. Public concerns regarding current data protection obligations imposed on them by information processing, privacy and security may cause certain data protection authorities. Such clients may also some of OneMarket’s clients’ customers to be less likely to view any alternative approaches to compliance as being too visit their websites or otherwise interact with them. If enough costly, too burdensome, too legally uncertain or otherwise customers choose not to visit OneMarket clients’ websites objectionable and therefore decide not to do business or otherwise interact with them, its clients could stop using with OneMarket. OneMarket’s network. This, in turn, would be likely to reduce OneMarket and its clients may be at risk of enforcement the value of OneMarket’s service and slow or eliminate the actions taken by certain EU data protection authorities growth of its business. until such point in time that they may be able to ensure European Union Directive 95/46/EC (the Directive) has that all transfers of personal data to OneMarket in the required European Union member states to implement United States from the EEA are conducted in compliance data protection laws to meet its strict privacy requirements. with all applicable regulatory obligations, the guidance of Among other requirements, the Directive regulates transfers data protection authorities and evolving best practices. OneMarket may find it necessary to establish systems to maintain personal data originating from the European Union in the EEA, which may involve substantial expense and may cause it to need to divert resources from other aspects of its business, all of which may adversely affect its business.
PAGE 78 // WESTFIELD CORPORATION PROPOSAL In addition, data protection regulation is an area of increased —— the level of market acceptance of OneMarket’s network focus and changing requirements. The European Union and products; adopted the GDPR in 2016 and it will enter into force on —— network outages or actual or perceived security 25 May 2018. The United Kingdom is also anticipated to breaches; enact legislation that is consistent with the GDPR, subject —— pricing pressure as a result of competition or to relatively minor national-level variation, in 2018. The otherwise; GDPR supersedes the EU Data Directive and national implementations thereof, and establishes new requirements —— seasonal buying patterns for technology spending; applicable to the handling of personal data. The GDPR may —— fluctuations in the timing of sales and marketing and impose additional obligations and risk upon OneMarket’s other operating expenses that OneMarket may incur business and, by providing for penalties of up to the greater to grow and expand OneMarket’s operations and to of 4% of worldwide revenue or €20 million, substantially remain competitive; increases the penalties to which OneMarket could be —— the timing of significant Shopper Exchange advertising subject in the event of any non-compliance. Additionally, the campaigns; European Union is anticipated to adopt changes to Directive 2002/58/EC, referred to as the e-Privacy Directive, in 2018 —— adverse litigation judgments, settlements or other in the form of an e-Privacy Regulation that would supersede litigation-related costs; the existing e-Privacy Directive and national implementations —— changes in the legislative or regulatory environment; thereof, including the UK’s Privacy and Electronic —— fluctuations in foreign currency exchange rates; Communications Regulations. The e-Privacy Regulation, —— costs related to the acquisition of businesses, which is anticipated to address matters such as the talent, technologies or intellectual property, including transmission of marketing and electronic communications potentially significant amortisation costs and possible (including the use of cookies) and the contents thereof, write-downs; and is anticipated to provide for administrative penalties of up to the greater of 4% of worldwide revenue or €20 million, —— general economic conditions in either domestic or mirroring those provided for in the GDPR. OneMarket may international markets, including geopolitical uncertainty incur substantial expense in complying with the obligations and instability. imposed by the GDPR and the e-Privacy Regulation and it The variability and unpredictability of OneMarket’s periodic may be required to make significant changes in its business results of operations or other operating metrics could result operations, which it may be unable to complete in a timely, in its failure to meet the expectations of investors with commercially reasonable manner or at all, all of which may respect to revenue or other metrics for a particular period. adversely affect its business, results of operations, financial If OneMarket fails to meet or exceed such expectations for condition and prospects. these or any other reasons, the share price of OneMarket Shares could fall substantially, and it could face costly (k) OneMarket’s results of operations may fluctuate lawsuits, including class actions. significantly and may not fully reflect the underlying performance of its business, which makes it difficult (l) OneMarket depends on its management team and to predict and could cause its results of operations other qualified personnel, and it needs to hire and to fall below expectations. retain additional qualified personnel to grow and OneMarket may experience significant fluctuations in its manage its business and to effectively manage results of operations, including revenue, gross margin, succession. If it fails to attract, integrate, and retain operating margin, profitability, cash flow from operations, such personnel, its business could be harmed. from period to period due to a number of factors that The success of OneMarket, including its ability to effectively make its future results difficult to predict. Factors, many of execute its business strategy, depends to a significant extent which are outside of OneMarket’s control, that may cause on its key personnel, in particular the key management significant fluctuations in its periodic results of operations, personnel described in section 4.12. These individuals have include, without limitation: extensive experience in, and knowledge of, the industry in —— the level of demand for OneMarket’s products and which OneMarket operates. activity on the network in the period; OneMarket’s United States based employees, including its —— the timing of adding new clients; executive officers, work for OneMarket on an “at-will” basis, which means they may terminate their employment with —— the timing and success of new product introductions OneMarket at any time. by OneMarket or its competitors or any other change in the competitive landscape of the market for technology products and services for the retail sector;
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Loss of key personnel or changes that adversely affect OneMarket also relies on third-party computer systems, OneMarket’s ability to retain key personnel or an inability broadband and other communications systems and to promptly identify and recruit a suitable successor to a service providers in connection with providing access to key role could materially impact OneMarket’s business, its platform generally. Any interruptions, outages or delays operational performance and financial results. OneMarket in OneMarket’s systems and infrastructure, its business does not currently maintain key-person life insurance policies and/or third parties, or deterioration in the performance on any member of its senior management team and other of these systems and infrastructure, could impair its key employees. ability to provide access to its network. Fire, flood, power OneMarket may need to hire and retain additional qualified loss, telecommunications failure, hurricanes, tornadoes, personnel to manage and grow its business. Competition earthquakes, tsunamis, other natural disasters, acts of war for key personnel is strong, especially in the San Francisco or terrorism and similar events or disruptions may damage Bay Area where OneMarket’s headquarters are located, and or interrupt computer, broadband or other communications OneMarket cannot be sure that it will be able to attract and systems and infrastructure at any time. Any of these events retain a sufficient number of qualified personnel in the future, could cause system interruption, delays and loss of critical or that the compensation costs of doing so will not adversely data, and could prevent OneMarket from providing access affect its operating results. to its network. While OneMarket has backup systems for certain aspects of its operations, disaster recovery planning (m) OneMarket relies on services and software from by its nature cannot be sufficient for all eventualities. If any other parties. Defects in or the loss of access to of these events were to occur, it could harm OneMarket’s software or services from third parties could increase business, results of operations, financial condition OneMarket’s costs and adversely affect its business. and prospects. OneMarket relies on technologies and services from third OneMarket outsources substantially all of the infrastructure parties to operate critical functions of its business, including relating to its services as well as its data. Third-party cloud cloud infrastructure services and customer relationship providers run their own platforms that OneMarket accesses, management services. OneMarket’s business might be and it is, therefore, vulnerable to their service interruptions. disrupted if any of the third-party software or services it OneMarket may experience interruptions, delays and utilises, or functional equivalents thereof, were unavailable outages in service and availability from time to time as due to extended outages or interruptions or because they a result of problems with its third-party cloud providers’ are no longer available on commercially reasonable terms infrastructure. Lack of availability of this infrastructure or prices. In each case, OneMarket might be required to could be due to a number of potential causes including either seek licenses to software or services from other technical failures, natural disasters, fraud or security attacks parties and redesign its products to function with such that OneMarket cannot predict or prevent. If OneMarket’s software or services or develop these components itself, security, or that of any of these third-party cloud providers, which would result in increased costs and could result in is compromised, OneMarket’s network is unavailable or delays in its release of new product offerings. OneMarket its clients are unable to use OneMarket’s network within a might be forced to limit the features available in its products. reasonable amount of time or at all, then its business, results Furthermore, the network’s operation might be disrupted or of operations, financial condition and prospects could be terminated. These disruptions, delays and feature limitations, adversely affected. In some instances, OneMarket may not if they occur, might materially harm OneMarket’s business, be able to identify the cause or causes of these performance results of operations, financial condition and prospects. problems within a period of time acceptable to its clients. OneMarket is dependent on third party applications that It is possible that OneMarket’s clients and potential clients may prevent it from updating its current products or would hold it accountable for any breach of security affecting uploading new products in a timely manner. In addition, a third-party cloud provider’s infrastructure and OneMarket OneMarket’s products will need to operate with servers, may incur significant liability from those clients and from third mobile devices and software applications predominantly parties with respect to any breach affecting these systems. through the use of protocols, many of which are created and OneMarket may not be able to recover a material portion of maintained by third parties. OneMarket therefore will depend its liabilities to its clients and third parties from a third-party on the operability of OneMarket’s products with such cloud provider. It may also become increasingly difficult to third-party services, mobile devices and mobile operating maintain and improve OneMarket’s performance, especially systems, as well as cloud-enabled hardware, software, during peak usage times, as its platform becomes more networking, browsers, database technologies and protocols complex and the usage of the network increases. Any of that it does not control. Any changes in such technologies the above circumstances or events may harm OneMarket’s that degrade the functionality of OneMarket’s products or business, results of operations, financial condition give preferential treatment to competitive services could and prospects. adversely affect adoption and usage of its network.
PAGE 80 // WESTFIELD CORPORATION PROPOSAL (n) Adverse general economic and market conditions markets and where business practices may create internal and reductions in technology spending may control risks. There are certain risks inherent in conducting reduce demands for OneMarket’s products, which international business, including: could harm its revenue, results of operations and —— fluctuations in foreign currency exchange rates; cash flows. —— new, or changes in, regulatory requirements; OneMarket’s revenue, results of operations and cash flows depend on the overall demand for its products and access —— tariffs, export and import restrictions, restrictions on to its network. Concerns about the systemic impact of a foreign investments, sanctions, and other trade barriers potential widespread recession (in the United States or or protection measures; internationally), energy costs, geopolitical issues or the —— costs and technical difficulties of localising products availability and cost of credit could lead to increased market and services; volatility, decreased consumer confidence and diminished —— lack of acceptance of localised products and services; growth expectations in the U.S. economy and abroad, which —— difficulties in and costs of staffing, managing, and in turn could result in reductions in technology spending by operating international operations; OneMarket’s existing and prospective clients. Prolonged economic slowdowns may result in clients requesting —— tax issues, including restrictions on repatriating OneMarket to renegotiate existing contracts on less earnings and with respect to OneMarket’s corporate advantageous terms to OneMarket than those currently in operating structure and intercompany arrangements; place or defaulting on payments due on existing contracts —— weaker intellectual property protection; or not renewing at the end of the contract term. —— economic weakness or currency related crises; In addition, the economies of countries in Europe have been —— the burden of complying with a wide variety of laws, experiencing weakness associated with high sovereign including those relating to labour matters, consumer debt levels, weakness in the banking sector and uncertainty and data protection, privacy, network security, over the future of the Eurozone. If economic conditions in encryption, taxes, antitrust, trade regulation and anti- Europe and other key markets for OneMarket’s applications bribery and corruption laws; continue to remain uncertain or deteriorate further, clients —— longer payment cycles and greater difficulty in may delay or reduce their technology spending. During weak collecting accounts receivable; economic times, there is an increased risk that one or more of OneMarket’s clients will file for bankruptcy protection. —— OneMarket’s ability to adapt to sales practices and OneMarket also faces the risk from international clients client requirements in different cultures; that file for bankruptcy protection in foreign jurisdictions, —— corporate espionage; and particularly given that the application of foreign bankruptcy —— political instability and security risks in the countries laws may be more difficult to predict. In addition, OneMarket where business is conducted. may determine that the cost of pursuing any claim may outweigh the recovery potential of such claim. As a result, For example, in June 2016, the United Kingdom held a broadening or protracted extension of an economic referendum and voted in favour of leaving the European downturn could harm OneMarket’s business, revenue, Union, and subsequently has invoked Article 50 of the results of operations, cash flows and prospects. Treaty of Lisbon in order to initiate negotiations regarding the United Kingdom’s exit from the European Union. This (o) OneMarket’s global operations expose OneMarket has created political and economic uncertainty, particularly to risks that could have a material adverse effect in the United Kingdom and the European Union, and could on its business, results of operations, and financial cause disruptions to, and create uncertainty surrounding, condition. OneMarket’s business in the United Kingdom and European OneMarket expects to generate substantially all of its Union, including affecting its relationships with clients, revenue from clients outside of Australia, and to conduct customers and employees, and could have a material its business activities in various countries around the world, impact on the regulatory regime applicable to operations including markets where it may have limited experience, in the United Kingdom. where the challenges of conducting its business can be As OneMarket expands its international operations, it may significantly different from those it may face in other become more exposed to the effects of fluctuations in currency exchange rates. A strengthening of the U.S. dollar could increase the real cost of OneMarket’s network to its clients outside of the United States, which could adversely affect its business, operating results, financial condition, cash flows and prospects.
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Although OneMarket may in the future decide to undertake Under Section 382 of the Internal Revenue Code of 1986, foreign exchange hedging transactions to cover a portion of as amended, if a corporation undergoes an “ownership its foreign currency exchange exposure, it currently does not change,” generally defined as a greater than 50% change hedge its exposure to foreign currency exchange risks. (by value) in its equity ownership over a three year period, In addition, compliance with foreign and U.S. laws and the corporation’s ability to use its pre-change net operating regulations that are applicable to OneMarket’s international loss carry-forwards and other pre-change tax attributes, operations may be complex and may increase its cost such as research tax credits, to offset its post-change of doing business in international jurisdictions and income may be limited for U.S. federal income tax purposes. OneMarket’s international operations could expose it to Other jurisdictions in which OneMarket operates, including fines and penalties if it fails to comply with these regulations. the United Kingdom, also have rules limiting the ability to These laws and regulations include import and export use pre-change of ownership tax attributes to mitigate requirements and anti-bribery laws, such as the United post-change income or gains. OneMarket may experience States Foreign Corrupt Practices Act of 1977, as amended, ownership changes in the future as a result of subsequent the United Kingdom Bribery Act 2010, and local laws shifts in its equity ownership. As a result, if OneMarket prohibiting corrupt payments to governmental officials. earns net taxable income, its ability to use pre-change net Any violations of these laws could subject OneMarket to operating loss carry-forwards to offset taxable income may civil or criminal penalties, including substantial fines or be subject to limitations, which could potentially result in prohibitions on its ability to offer its network in one or more increased future tax liability to it. countries and could also materially damage its reputation (q) OneMarket’s failure to protect its intellectual and brand. These factors may have an adverse effect on property rights and proprietary information could OneMarket’s business, operating results, financial condition harm its business. and prospects. OneMarket’s business is heavily dependent on its ability to (p) Tax maintain its rights to the intellectual property in its products A significant tax reform bill has recently been enacted in and network. OneMarket relies on laws relating to trade the United States, with most provisions generally effective secrets, copyright (including in or relating to its software for taxable years beginning 1 January 2018. The changes products) and trade marks to assist in protecting its implemented under this bill include, among other items, proprietary rights. However, there is a risk that unauthorised a reduction of the corporate income tax rate to 21%, use or copying of OneMarket’s data, technology or the reduction or elimination of certain corporate tax trademarks may occur. Monitoring unauthorised use of incentives, modifications to the existing regime for taxing OneMarket’s intellectual property is difficult and may require overseas earnings, required capitalisation of research significant resources. OneMarket may be unable to detect and development expenditures, limitations on interest unauthorised use of its intellectual property rights. deductibility, and measures to prevent base erosion and In addition, there may be a risk that the validity, ownership or profit shifting. use of intellectual property relating to OneMarket’s business OneMarket has undertaken, and may from time to time is challenged by third parties. undertake, various intercompany transactions and legal OneMarket may be required to incur significant costs entity restructurings that involve international subsidiaries. and expenses in protecting its intellectual property rights OneMarket would consider various factors in evaluating or defending claims by third parties for infringement of these potential transactions and restructurings, including the intellectual property rights. If OneMarket is not successful alignment of its corporate structure with its organisational in any such litigation or claims, it may be required to pay objectives, the operational and tax efficiency of its corporate damages and costs to third parties. In addition, if any such structure, and the long-term cash flows and cash needs claims result in OneMarket being unable to continue to use of its business. Such transactions and restructurings could any of its key intellectual property, and it is unable to find a negatively impact OneMarket’s overall tax rate and result cost-effective alternative, then this may materially adversely in additional tax liabilities. In addition, OneMarket may be impact OneMarket’s reputation, business, operations, subject to audits of its income, sales and other transaction financial performance and prospects. Moreover, whether taxes by Australian, United States, United Kingdom or other or not litigation is successful, OneMarket’s involvement tax authorities. Outcomes from these audits could have an in litigation could result in significant cost and expense to adverse effect on OneMarket’s overall tax rate and result in OneMarket and cause a distraction to management. additional tax liabilities. There is also the risk that if OneMarket develops new intellectual property in the future, it may not be able to obtain adequate legal protection for such intellectual property. Competitors may also be able to independently develop intellectual property and technologies similar to that of OneMarket, without infringing any of its intellectual property or other proprietary rights. This may adversely impact OneMarket’s competitiveness, revenue, financial performance and prospects.
PAGE 82 // WESTFIELD CORPORATION PROPOSAL (r) Future disputes could have a material adverse (t) Future acquisitions, strategic investments, impact on OneMarket’s operating results and partnerships or alliances could be difficult to identify financial condition. and integrate, divert the attention of key management OneMarket expects that software product developers personnel, disrupt OneMarket’s business, dilute will increasingly be subject to infringement claims as the stockholder value and harm its results of operations number of products and competitors grows and the and financial condition. functionality of products in different industry segments OneMarket has in the past acquired, and may in the future overlaps. OneMarket’s competitors or other third parties seek to acquire or invest in, businesses, products or may challenge the validity or scope of its intellectual technologies that OneMarket believes could complement property rights or its rights to the customer data which or expand its current network, enhance its technical it has acquired. A claim may also be made relating to capabilities or otherwise offer growth opportunities. technology that OneMarket acquires or licences from The pursuit of potential acquisitions may divert the third parties. If OneMarket were subject to a claim of attention of management and cause OneMarket to infringement, regardless of the merit of the claim or incur various expenses in identifying, investigating and OneMarket’s defences, the claim could require costly pursuing suitable acquisitions, whether or not they are litigation to resolve and the payment of substantial damages, consummated. The risks OneMarket faces in connection require significant management time, cause OneMarket with acquisitions include: to enter into unfavourable royalty or license agreements, —— encountering difficulties or unforeseen expenditures require OneMarket to discontinue the sale of some or all in integrating the business, technologies, products, of its products, require OneMarket to indemnify its clients personnel, or operations of a company that OneMarket or third-party service providers and/or require OneMarket acquires, particularly if key personnel of the acquired to expend additional development resources to redesign company decide not to work for OneMarket; its products. Any one or more of these outcomes could —— an acquisition that may disrupt OneMarket’s ongoing harm OneMarket’s business, results of operations, financial business, divert resources, increase expenses, and condition and prospects. distract management; The outcome of any litigation, regardless of its merits, —— vendor disputes concerning the terms of any is inherently uncertain. Regardless of the merits of any acquisition; claims that may be brought against OneMarket, pending or future litigation could result in a diversion of management’s —— OneMarket’s use of cash to pay for acquisitions, which attention and resources and OneMarket may be required to would limit other potential uses for its cash; incur significant expenses defending against these claims. —— if OneMarket incurs debt to fund an acquisition, such If OneMarket were unable to prevail in litigation it could incur debt may subject it to material restrictions on its ability substantial liabilities. Any adverse determination related to to conduct its business; and litigation could require OneMarket to change its technology —— if OneMarket issues a significant amount of equity or its business practices, pay monetary damages, or securities in connection with acquisitions, existing enter into royalty or licensing arrangements, which could stockholders may be diluted and earnings per ordinary adversely affect its operating results and cash flows, harm share may decrease. OneMarket’s reputation, or otherwise negatively impact its business. The occurrence of any of these risks could have an adverse effect on OneMarket’s business, results of operations, (s) The OneMarket Board and management will have financial condition and prospects. broad discretion in the application of OneMarket’s net cash. The OneMarket Board, the OM Delaware board of directors and OneMarket management will have broad discretion in the application of OneMarket’s net cash, including for any of the purposes described in section 4, and OneMarket Shareholders will not have the opportunity to assess whether the net cash is being used appropriately. Because of the number and variability of factors that will determine use of the net cash, its ultimate use may vary substantially from the currently intended use. The failure by OneMarket’s Board, the OM Delaware board of directors and OneMarket management to apply these funds effectively could harm its business. Pending its use, OneMarket may invest the net cash in short-term, investment-grade interest-bearing securities such as money market accounts, certificates of deposit, commercial paper, and guaranteed obligations of the U.S. government. These investments may not yield a favourable return to OneMarket Shareholders.
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(u) Catastrophic events may disrupt OneMarket’s (w) The requirements of being a listed company may business. strain OneMarket’s resources, divert management’s Natural disasters or other catastrophic events may attention, and affect its ability to attract and retain cause damage or disruption to OneMarket’s operations, executive management and qualified board members. international commerce and the global economy, and thus As an ASX listed public company, OneMarket Limited will could harm its business. In particular, OneMarket has a large be subject to the reporting requirements of the Corporations employee presence in San Francisco, California and the Act, the ASX Listing Rules and other applicable securities west coast of the United States contains active earthquake rules and regulations. OneMarket expects that the zones. In the event of a major earthquake, tsunami, requirements of these rules and regulations will continue hurricane or catastrophic event such as fire, power loss, to increase its legal, accounting, and financial compliance telecommunications failure, cyber-attack, war or terrorist costs, make some activities more difficult, time-consuming, attack, OneMarket may be unable to continue its operations and costly, and place significant strain on its personnel, and may endure system interruptions, reputational harm, systems, and resources. delays in its application development, lengthy interruptions OneMarket Limited’s reporting obligations as a public in its products, breaches of data security and loss of company will place a significant strain on its management, critical data, all of which could harm its business, results operational and financial resources, and systems for the of operations, financial condition and prospects. In addition, foreseeable future. Prior to this Demerger, OneMarket the insurance OneMarket maintains may not be adequate had limited corporate personnel and other resources. to cover its losses resulting from disasters or other OneMarket must significantly upgrade OneMarket’s business interruptions. finance and accounting systems which could significantly (v) Changes in financial accounting standards or increase OneMarket’s operating expenses and impact practices may cause adverse, unexpected financial OneMarket’s ability or prevent OneMarket Limited from reporting fluctuations and affect OneMarket’s timely reporting OneMarket’s operating results and timely reported results of operations. filing required reports with the Australian Securities and Investments Commission. OneMarket must attract, AIFRS is subject to interpretation by various bodies formed train, and retain additional internal finance staff which will to promulgate and interpret appropriate accounting increase OneMarket’s operating costs. These additional principles. A change in accounting standards or practices costs and burdens could materially and adversely impact can have a significant effect on OneMarket’s reported OneMarket’s business, financial condition, operating results results and may even affect its reporting of transactions and prospects. completed before the change is effective. New accounting pronouncements and varying interpretations of accounting As a result of the complexity involved in complying with pronouncements have occurred and may occur in the the rules and regulations applicable to ASX listed public future. Changes to existing rules or the questioning of companies, OneMarket’s management’s attention may be current practices may adversely affect OneMarket’s diverted from other business concerns, which could harm reported financial results or the way it conducts its business. its business, results of operations and financial condition. Accounting for revenue from sales of subscriptions to Although OneMarket has already hired additional employees software is particularly complex, is often the subject of or engaged outside consultants to assist it in complying with intense scrutiny by regulators, and may evolve as various these requirements, it may need to hire more employees in bodies continue to consider applicable accounting the future or engage outside consultants, which will increase standards in this area. its operating expenses. As a result of disclosure of information in this Demerger Booklet and in filings required of an ASX listed public company, OneMarket’s business and financial condition will become more visible, which may result in an increased risk of threatened or actual litigation, including by competitors and other third parties. If such claims are successful, OneMarket’s business and results of operations could be harmed, and even if the claims do not result in litigation or are resolved in its favour, these claims, and the time and resources necessary to resolve them, could divert the resources of OneMarket’s management and harm its business, results of operations, financial condition and prospects.
PAGE 84 // WESTFIELD CORPORATION PROPOSAL (x) OneMarket is required to comply with governmental (b) The share price of OneMarket Shares may be volatile export control laws and regulations. A failure to or may decline regardless of OneMarket’s operating comply with these laws and regulations could have an performance. adverse effect on its business and operating results. The initial listing price of OneMarket Shares will not OneMarket’s network and business are subject to export necessarily reflect the price at which investors in the market control and economic sanctions laws and regulations, will be willing to buy and sell OneMarket Shares following including U.S. and European Union export control and this listing. The share prices of the securities of other newly economic sanctions laws and regulations. U.S. export public early stage start-up companies have historically been control and economic sanctions contain various restrictions highly volatile. Accordingly, the share price of OneMarket including prohibiting the export, re-export, and transfer of Shares after listing is likely to be volatile and could be subject certain products and services to embargoed or sanctioned to fluctuations in response to various factors, many of which countries and sanctioned persons, as well as requiring are beyond its control. Factors that could cause fluctuations authorisations, such as a license or a license exception, in share price of OneMarket Shares include the following: for the export, re-export or transfer of encryption items. —— participants in the Demerger electing to sell their In addition, various countries regulate the import of certain OneMarket Shares after listing because an investment encryption technology, including import permitting and in OneMarket Shares does not meet their investment licensing requirements. OneMarket incorporates encryption criteria; technology into certain of its products and its products are —— overall performance of the equity markets and/or subject to these laws and regulations. publicly-listed technology companies; While OneMarket has taken steps to comply with these —— actual or anticipated fluctuations in revenue or other laws, OneMarket cannot guarantee that inadvertent operating metrics; violations of such laws have not occurred or will not —— changes in outlook information provided to the public; occur in connection with the distribution of its products by OneMarket or its partners. If OneMarket were to fail —— failure to meet the estimates or the expectations of to comply with the applicable export and sanctions laws, investors; customs regulations and import regulations, it could be —— recruitment or departure of key personnel; subject to substantial civil and criminal penalties, including —— the economy as a whole and market conditions in the fines for the company and incarceration for responsible retail industry; employees and managers, and the possible loss of export or import privileges. Further, conducting the necessary —— rumours and market speculation involving OneMarket diligence for a particular sale may be time consuming and or other companies in its industry; result in delay or loss of sales opportunities. —— announcements by OneMarket or its competitors OneMarket may also be harmed, become the subject of significant innovations, acquisitions, strategic of government investigations or penalties, and incur partnerships, joint ventures, or capital commitments; reputational harm for violations of the export and sanctions —— new laws or regulations or new interpretations of laws by OneMarket or its partners. Further, changes in existing laws or regulations applicable to OneMarket’s OneMarket’s network or changes in export and import business; regulations may create delays in the introduction of its —— lawsuits threatened or filed against OneMarket; network in international markets, prevent its clients with —— other events or factors, including those resulting from international operations from deploying OneMarket’s network war, incidents of terrorism, or responses to these globally or, in some cases, prevent the export or import of events; and its network to certain countries, governments or persons altogether. Any decreased use of OneMarket’s network or —— sales of OneMarket Shares by shareholders or the limitation on OneMarket’s ability to export or sell its network issue of additional OneMarket Shares. would likely harm its business, financial condition, operating Stock markets have experienced extreme price and volume results and prospects. fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Share 6.3 Risks specific to an investment in OneMarket prices of many companies have fluctuated in a manner (a) There has been no prior public market for unrelated or disproportionate to the operating performance OneMarket Shares. of those companies. In the past, shareholders have There has been no public market for OneMarket Shares. instituted securities class action litigation following periods OneMarket Limited has applied to list OneMarket Shares of market volatility. If OneMarket were to become involved on the Australian Securities Exchange, under the symbol in securities litigation, it could subject it to substantial costs, “OMN”. Accordingly, OneMarket cannot assure you of the divert resources and the attention of management from its likelihood that an active trading market for OneMarket Shares business, and harm OneMarket’s business. will develop or be maintained, the liquidity of any trading market, your ability to sell your OneMarket Shares when desired, or the prices that you may obtain for your shares.
WESTFIELD CORPORATION PROPOSAL // PAGE 85 SECTION 6 RISK FACTORS
(c) If securities or industry analysts do not publish are operating fully and efficiently. There is a risk that the research, or publish inaccurate or unfavourable establishment of these capabilities may take longer than research, about OneMarket’s business, the price of expected or may involve greater costs than anticipated. OneMarket Shares and trading volume could decline. If these internal capabilities are not operating fully prior to The trading market for OneMarket Shares will depend in the Demerger Implementation Date, OneMarket’s ability part on the research and reports that securities or industry to effectively operate its business on a standalone basis analysts publish about it or its business. Securities and may be significantly impaired, which could have a material industry analysts do not currently, and may never, publish adverse effect on its business, financial condition, results research on OneMarket. If few securities analysts commence of operations and prospects. coverage, or if industry analysts cease coverage, the trading (c) OneMarket’s historical financial information does not price for OneMarket Shares may be negatively affected. reflect the results of an independent, public listed If one or more of the analysts who cover OneMarket company downgrade OneMarket Shares or publish inaccurate or OneMarket Limited does not have an operating history as an unfavourable research about its business, the price of independent, public listed company. The historical financial OneMarket Shares would likely decline. If one or more information included in section 5 will not reflect the financial of these analysts cease coverage or fail to publish reports condition that OneMarket Limited would have achieved as on a regular basis, demand for OneMarket Shares could an independent, public listed company during the periods decrease, which might cause the share price and trading presented or those that it will achieve in the future due to the volume of OneMarket Shares to decline. following factors: (d) OneMarket Limited does not currently intend to —— Westfield has historically provided the OneMarket pay dividends for the foreseeable future and, business with working capital requirements and capital consequently, your ability to achieve a return on your for general corporate purposes, including acquisitions investment will depend on appreciation of the value and capital expenditures. After the Demerger, other of your OneMarket Shares. than the approximately $160 million of cash on hand OneMarket Limited has never declared or paid any cash anticipated on the Demerger Implementation Date dividends on its shares and does not intend to pay any (expected to be around 7 June 2018), Westfield cash dividends in the foreseeable future. OneMarket will not be providing the OneMarket business with anticipates that it will retain all of its future earnings for use additional funds to finance its working capital or other in the operation of its business and for general corporate cash requirements. Without the opportunity to obtain purposes for the foreseeable future. Any determination to capital from Westfield, OneMarket may, in the medium pay dividends in the future will be at the discretion of the term, need to obtain external funding and there is no OneMarket Board. Accordingly, investors must rely on sales guarantee that such funding will be available at all or of their OneMarket Shares after price appreciation, which on terms that are as favourable as those it could have may never occur, as the only way to realise any future gains obtained as part of Westfield. on their investment. —— The OneMarket business has been operated by Westfield as part of its broader corporate 6.4 Risks relating to the Demerger organisation and was supported by Westfield’s (a) Benefits of the Demerger may not materialise corporate infrastructure including group accounting, After the Demerger, OneMarket may not be able to achieve treasury, taxation, legal, insurance administration, some or all of the expected potential advantages of the investor relations and general human resources. Demerger as outlined in section 1.1 “Reasons to vote OneMarket’s historical financial information reflect for the Demerger”. If that occurs, the business, financial allocations of corporate expenses from Westfield for condition and prospects of OneMarket may be materially these and similar functions. These allocations may adversely affected. be more or less than the comparable expenses that OneMarket would have incurred had it operated as (b) There is potential for delays, unexpected costs an independent, public listed company. and other issues in establishing OneMarket as —— OneMarket has benefited from Westfield’s size and a standalone entity purchasing power and may lose these benefits as As part of the implementation of the Demerger, OneMarket an independent company. is replacing corporate infrastructure and support services provided by Westfield with internal capability and third party (d) The Scheme Court may not approve the Demerger contracts. It is intended that OneMarket will operate as a or its approval may be delayed standalone entity from the Demerger Implementation Date There is a risk that the Scheme Court may not approve with no transitional services being provided by Westfield. the Demerger or that the approval of the Scheme Court During OneMarket’s transition to being a standalone entity, is delayed. it may incur increased costs to implement these processes and it may take some time to ensure that all processes
PAGE 86 // WESTFIELD CORPORATION PROPOSAL SECTION 7 TAX IMPLICATIONS OF THE DEMERGER
This section contains an overview of the Australian tax implications of the Demerger 7.1 Scope This tax summary is based on the ATO’s preliminary, The following is a general summary of the Australian income but considered, views in respect of the income tax tax and goods and services tax (GST) implications arising consequences of the Demerger, and it is expected that the for Westfield Shareholders as a result of the Demerger. As final class ruling will be consistent with this summary. this summary is necessarily general in nature, Westfield Westfield Shareholders should review the final class ruling Shareholders should consult with their professional tax when it is issued by the ATO. advisor regarding their particular circumstances. 7.3 Overview of the Demerger This tax summary only addresses the position of Westfield To implement the Demerger, Westfield will undertake the Shareholders who hold their Westfield Shares on capital account. Distribution. Under the Demerger, instead of Westfield This tax summary does not address the Australian income Shareholders receiving their Distribution Entitlement in cash, tax consequences for Westfield Shareholders who: Westfield will apply this amount on behalf of those Westfield —— hold their Westfield Shares on revenue account or as Shareholders as consideration for the transfer of OneMarket trading stock; Shares under the Demerger Scheme. Westfield will transfer —— have elected for the Taxation of Financial Arrangement one OneMarket Share for every 20 Westfield Shares held provisions (Division 230 of the Income Tax Assessment by Westfield Shareholders on the Westfield Register on the Act 1997 (Cth) (ITAA 1997)) to apply in respect of their Demerger Record Date. Westfield Shares; or From an Australian income tax perspective, the Distribution —— acquired their Westfield Shares under a Westfield will consist of a dividend component, being the Demerger Equity Incentive Plan. Dividend, and potentially, a capital return component, being the Capital Reduction. This tax summary does not address any tax consequences of participating in the Demerger arising under the laws of The amount of the Distribution will not be known until jurisdictions other than Australia. after the Demerger Implementation Date. It will be an amount equal to the equity value of the OneMarket Shares This tax summary is based on Australian tax laws and calculated on a 10 day VWAP commencing on the date of regulations, interpretations of such laws and regulations, and commencement of trading of OneMarket Shares on ASX administrative practice as at the date of this Demerger Booklet. (including on a deferred settlement basis). The Demerger The comments in this section are generally directed at Westfield Dividend component of the Distribution will be that amount Shareholders who are Australian residents and who acquired, of the Distribution up to A$150 million. If there is an excess or are taken to have acquired, their Westfield Shares after of the Distribution over A$150 million that excess will be the 19 September 1985 (i.e. post-CGT assets). Where relevant, Capital Reduction. specific comments have been made regarding: The Demerger Dividend will be unfranked and will be —— Westfield Shareholders who are not Australian residents covered by a declaration that it is ‘conduit foreign income’ and who do not hold their Westfield Shares at or through for the purposes of the ITAA 1997. a permanent establishment in Australia; and 7.4 Demerger tax relief not available —— Westfield Shareholders who acquired, or are taken to have acquired, their Westfield Shares before The view of the ATO is that demerger tax relief is not 20 September 1985 (i.e. pre-CGT assets). available in respect of the Demerger. The ATO’s position is that the requirement in s.125-70(1)(c) that under the 7.2 Class ruling restructuring, Westfield Shareholders acquire OneMarket Westfield has been engaging with the ATO on the expected Shares “and nothing else” in relation to their Westfield Australian income tax outcomes that arise from the Shares will not be satisfied due to the nexus of the Demerger, and has requested a class ruling. Demerger to the Unibail-Rodamco Transaction.
WESTFIELD CORPORATION PROPOSAL // PAGE 87 SECTION 7 TAX IMPLICATIONS OF THE DEMERGER
This means that Westfield Shareholders will not be able to For CGT purposes (including eligibility for the CGT discount disregard any capital gain or assessable income that arises concession), OneMarket Shares should be treated as having from the Demerger. been acquired on the Demerger Implementation Date. 7.5 Demerger Dividend 7.8 Other matters The Demerger Dividend will be unfranked. Westfield (a) Australian Tax File Number (TFN) and Australian Shareholders who receive the Demerger Dividend directly Business Number (ABN) must include the amount of the Demerger Dividend in their Westfield may be required to withhold and pay to the ATO assessable income. an amount equal to 47 per cent of the Demerger Dividend For non-resident Westfield Shareholders, the Demerger in respect of Westfield Shareholders who do not provide to Dividend should not be assessable income in Australia nor Westfield their TFN, TFN exemption or their ABN. Westfield subject to dividend withholding tax as it will be covered by Shareholders who have not previously done so should a declaration that the amount is ‘conduit foreign income’. consider providing these details to Westfield. 7.6 Capital Reduction Following the Demerger, it is expected Westfield To the extent there is a Capital Reduction, the Capital Shareholders will be given the opportunity to quote their Reduction should not be a dividend for Westfield TFN, TFN exemption or their ABN in respect of their Shareholders for Australian income tax purposes. OneMarket Shares. Capital gains tax (CGT) event G1 will happen for Westfield Westfield Shareholders need not quote a TFN, TFN Shareholders in respect of their Capital Reduction exemption or ABN in respect of their OneMarket Shares. Entitlement on the Demerger Implementation Date. However, if they do not, then TFN withholding may be required to be deducted from any dividends paid by Under CGT event G1, the cost base and reduced cost base OneMarket at the highest marginal tax rate plus the of each Westfield Share will be reduced (but not below nil) by Medicare levy (currently 47% in total). In this regard, the Capital Reduction Entitlement in respect of that Westfield on 17 August 2017, the Australian Federal Government Share and a capital gain will arise to the extent (if any) that introduced the Medicare Levy Amendment (National the Capital Reduction Entitlement in respect of that Westfield Disability Insurance Scheme Funding) Bill 2017 (Cth) into Share exceeds the cost base of that share. the House of Representatives. If enacted in its current form, A capital gain made from CGT event G1 will be eligible this Bill would increase the Medicare levy from 2% to 2.5%, to be a discount capital gain for a Westfield Shareholder which would increase the sum of the highest marginal rate that is an individual, trust or complying superannuation plus the Medicare levy from 47% to 47.5%, for the 2019–20 entity and who acquired their Westfield Shares at least income year and later income years. 12 months before the Demerger Implementation Date. The discount factor will vary depending on the tax profile (b) Sale Facility of the Westfield Shareholder. Specifically, the discount factor The Australian income tax implications outlined in sections for resident individuals and trusts is 1/2 and for complying and should apply equally to Selling Shareholders whose superannuation entities is 1/3. OneMarket Shares are sold by the Sale Agent under the Sale No CGT consequences should arise for Westfield Facility. This means that a capital gain or assessable income Shareholders in respect of Westfield Shares acquired, or may arise for Australian resident Selling Shareholders in taken to have been acquired, before 20 September 1985. respect of their Westfield Shares under the Demerger. For non-resident Westfield Shareholders, the disposal of In addition, under the Sale Facility, Selling Shareholders their Westfield Shares should have no CGT consequences should be regarded for CGT purposes as having disposed if the Westfield Shares are not taxable Australian property, of their OneMarket Shares under CGT event A1 for which should be the case (except for non-resident Westfield consideration equal to the Sale Facility Proceeds. Australian Shareholders who made a CGT event I1 election in respect resident Selling Shareholders will make a capital gain if the of their Westfield Shares when they became a non-resident). Sale Facility Proceeds received exceed the cost base of their Further, no dividend withholding tax should arise in respect OneMarket Shares (worked out in section 7.7). Australian of the Capital Reduction on the basis that no part of the resident Selling Shareholders will make a capital loss if the Capital Reduction should be taken to be an unfranked Sale Facility Proceeds received is less than the reduced cost dividend. base of their OneMarket Shares (worked out in section 7.7). A capital gain under CGT event A1 will not be eligible for the 7.7 Acquisition of OneMarket Shares under CGT discount as the OneMarket Shares would have been the Demerger held for less than 12 months. The first element of the cost base and reduced cost base No Australian income tax consequences should arise for a OneMarket Share acquired under the Demerger will for Selling Shareholders who are non-residents. be equal to the Distribution applied for the transfer of the OneMarket Share on the Demerger Implementation Date. (c) GST Further information will be made available to Westfield There is no GST payable by Westfield Shareholders Shareholders once the Demerger has been implemented in respect of the Demerger. to allow Westfield Shareholders to determine the CGT cost base of their OneMarket Shares.
PAGE 88 // WESTFIELD CORPORATION PROPOSAL SECTION 8 ADDITIONAL INFORMATION
This section sets out additional statutory information, as well as some additional information that may be of interest to Westfield Shareholders 8.1 Substantial Shareholders As at the close of trading on the day before the date of this Demerger Booklet, the following persons had notified Westfield that they had voting power in 5% or more of Westfield Stapled Securities: Number of Westfield % of Stapled Name Stapled Securities Securities Members of the Lowy family and associates1 198,886,355 9.57 Unibail-Rodamco SE2 198,885,160 9.57 BlackRock, Inc. 171,692,340 8.26 The VanGuard, Group Inc. 166,125,662 7.99 State Street Corporation 104,067,478 5.01
1. On 15 December 2017, Mr Steven Lowy acquired 683,000 Westfield Securities and Hazel Equities Pty Ltd acquired 702,555 Westfield Securities pursuant to the vesting of performance rights held by Mr Peter Lowy and Mr Steven Lowy. Under the terms of the Deed Poll dated 12 December 2017 in favour of Unibail-Rodamco by, amongst others, FP Pty Ltd ATF The Frank Lowy Living Trust, the Lowy Foundation Pty Ltd as trustee for The Lowy Foundation, David Lowy and Steven Lowy (Voting Agreement), Unibail-Rodamco acquired a relevant interest in these additional Westfield Securities (although Unibail-Rodamco was not required to file a further substantial holder notification as its voting power did not change by more than one percent). 2. On 12 December 2017, Unibail-Rodamco acquired a relevant interest in 197,498,805 Westfield Securities held by the Lowy family pursuant to the Voting Agreement. Although Unibail-Rodamco and its subsidiaries have acquired a ‘relevant interest’ in Westfield Securities held by the Lowy family which are the subject of the Voting Agreement, it does not have any legal or beneficial interest in those Westfield Securities. On 15 December 2017, Mr Steven Lowy acquired 683,800 Westfield Securities and Hazel Equities Pty Ltd acquired 702,555 Westfield Securities pursuant to the vesting of performance rights held by Mr Peter Lowy and Mr Steven Lowy. Under the terms of the Voting Agreement, Unibail-Rodamco and its subsidiaries also acquired a relevant interest in these additional Westfield Securities (although neither Unibail-Rodamco nor the Lowy Family were required to file a further substantial holder notification as their voting power did not change by more than one percent). Unibail-Rodamco has no direct voting rights at the Meetings with respect to such relevant interests. Eroica B.V., a wholly owned subsidiary of Unibail-Rodamco, is also party to a cash-settled equity swap with Deutsche Bank AG (acting through its Sydney branch), which as at 12 December 2017 related to a notional 101,826,395 Westfield Securities (equivalent to approximately 4.9% of the Westfield Securities on issue). The cash settled equity swap does not give Unibail-Rodamco or any of its Related Bodies Corporate a relevant interest in Westfield Securities.
WESTFIELD CORPORATION PROPOSAL // PAGE 89 SECTION 8 ADDITIONAL INFORMATION
8.2 Marketable Securities of Westfield held by or controlled by Westfield Directors The following table shows the marketable securities of Westfield held by, or on behalf of, each Westfield Director as at 11 April 2018, the last practicable day before the date of this Demerger Booklet. Relevant Interest in Relevant Interest in Westfield Director Westfield Securities Employee Rights3 Sir Frank Lowy AC Nil Peter Lowy 198,886,355 1,973,721 Steven Lowy 1,973,721 Ilana Atlas 30,810 Nil Roy Furman 50,000 Nil Jeffrey Goldstein Nil Nil Michael Gutman OBE 992,802 3,617,033 Mark G. Johnson 20,000 Nil Mark R. Johnson 100,000 Nil Donald Kingsborough 8,000 798,723 John McFarlane 50,000 Nil Dawn Ostroff Nil Nil Brian Schwartz AM 31,110 Nil
Each Westfield Director intends to vote any Westfield Shares held by or on behalf of him or her in favour of the Demerger. Except as stated in this section of the Demerger Booklet: (a) there are no marketable securities of Westfield held by or on behalf of Westfield Directors as at the date of this Demerger Booklet; and (b) there has been no dealing by any Westfield Director in any marketable securities of Westfield in the four months preceding the date of this Demerger Booklet. 8.3 Benefits and agreements (a) Benefits in connection with retirement from office It is not proposed that any payment or other benefit be made or given to any director, secretary or executive officer of Westfield (or of its Related Bodies Corporate) as compensation for loss of, or as consideration for, or in connection with his or her retirement from, office in Westfield or in any of its Related Bodies Corporate as a result of the Demerger Scheme other than in his or her capacity as a Westfield Shareholder. (b) Agreements connected with or conditional on the Demerger Scheme Except as otherwise disclosed in this section: —— there are no contracts or arrangements between a Westfield Director and any other person, in connection with or conditional on the outcome of the Demerger Scheme; and —— no Westfield Director has a material interest in relation to the Demerger Scheme other than in their capacity as a Westfield Shareholder. (c) Interests of Westfield Directors in contracts with the OneMarket Group None of the Westfield Directors have an interest in any contract entered into by the OneMarket Group. (d) Benefits from OneMarket No Westfield Director has agreed to receive, or is entitled to receive, any benefit from OneMarket or any Related Body Corporate of OneMarket (other than a member of the Westfield Group) in connection with or conditional on the outcome of the Demerger Scheme, other than in their capacity as a holder of Westfield Stapled Securities or as set out in this Demerger Booklet.
3. As noted in section 4.4(a) of the Unibail-Rodamco Transaction Securityholder Booklet, Westfield will take such action as necessary to ensure that any Employee Rights which have not already vested prior to the Effective Date, do vest and, consistent with past practice, Westfield will purchase on market that number of Westfield Stapled Securities required to satisfy the vesting of those Employee Rights and transfer those Westfield Stapled Securities to the holders of those Employee Rights prior to the Demerger Record Date. As a result, the accelerated vesting of the Employee Rights will not be dilutive to Westfield Stapled Securityholders.
PAGE 90 // WESTFIELD CORPORATION PROPOSAL (e) Interests of OneMarket management in acquisition (b) Rights and duties of OneMarket Directors agreements The OneMarket Constitution deals with the rights and Members of OneMarket’s senior management team have obligations of directors and officers of OneMarket Limited, owned stock or otherwise had an interest in some of the including: companies acquired by OneMarket and currently own stock —— the appointment, retirement and removal of directors, in a company that OneMarket does business with. When including the managing director and chairperson; 12 Digit was acquired by OneMarket, Don Kingsborough, —— the appointment of a company secretary; OneMarket’s Chief Executive Officer, owned stock in the company (representing less than 2% of the total issued —— the remuneration of directors; stock of 12 Digit) and previously served in an advisory —— the powers of directors; capacity to that company. Mr. Kingsborough received —— meetings and written resolutions of directors; and the purchase price consideration for his shares at the time of the acquisition and, along with the other former —— the rights of directors and officers to be indemnified shareholders of 12 Digit, is entitled to receive additional (subject to statute) against all liabilities incurred as an contingent consideration if certain performance criteria are officer of OneMarket Limited, including all legal costs achieved by 12-Digit pursuant to the 12 Digit Acquisition incurred in defending or resisting proceedings, whether Agreement. Mr Kingsborough is also an investor in Shoptalk, criminal, civil, administrative or investigative in nature, a retail conference company that OneMarket sponsors. Mr relating to such liabilities, and the right of OneMarket Kingsborough’s investment in Shoptalk represents less than Limited to maintain insurance in respect of directors 5% of the total issued stock. and officers. Mike Blandina, OneMarket’s Executive Vice President (c) Composition of OneMarket Board of Product & Engineering and CTO is also an investor in The OneMarket Board will be comprised of at least three Shoptalk and had a small indirect investment in FluidM directors. Details of the directors of OneMarket Limited at the time it was acquired by OneMarket. following the implementation of the Demerger are set out 8.4 Capital structure of Westfield and Westfield in section 4.10. Corporation The quorum for a meeting of directors is two directors. Resolutions at a meeting of directors are to be decided As at the date of this Demerger Booklet, Westfield has by a majority vote. In the case of an equality of votes, the 2,078,089,686 Westfield Stapled Securities on issue and chairman of a meeting has a casting vote, unless only two Westfield Corporation has the same number of Westfield directors are present. Shares on issue. (d) General meetings 8.5 Summary of OneMarket Constitution General meetings of OneMarket Limited are to be held in OneMarket Limited is an Australian public company accordance with the Corporations Act, and each OneMarket registered under the Corporations Act. Upon the Demerger Shareholder will be entitled to receive notice of a general becoming effective, OneMarket Limited will adopt a meeting in accordance with the Corporations Act and, constitution for a public listed company in substitution for except in certain circumstances, attend and vote at general its existing constitution. The OneMarket Constitution is meetings of OneMarket Limited. designed for an ASX listed company and has regard to usual market practice for ASX listed companies. (e) Voting at a general meeting Some important features of the OneMarket Constitution Subject to any special rights or restrictions for the time are summarised below. being attached to any class of OneMarket Shares and to the OneMarket Constitution, at a general meeting, each (a) Powers of OneMarket Directors OneMarket Shareholder present in person, or by attorney, The directors of OneMarket are to manage the business corporate representative or proxy, or who delivers a direct of OneMarket (but excluding such business as dealt with vote, has one vote on a show of hands, and one vote for by way of a general meeting), and in doing so, may exercise each fully paid OneMarket Share on a poll, or for a partly all of the powers of OneMarket to borrow or raise money, to paid OneMarket Share, a fraction of a vote equal to the charge any property or business of OneMarket or all or any proportion which the amount paid on the OneMarket Share of its uncalled capital and to issue debentures or give any bears to the total issue price of the OneMarket Share. other security for a debt, liability or obligation of OneMarket Voting at any meeting of OneMarket Shareholders is by a or any other person. show of hands (unless a poll is demanded). Direct votes are counted only on a poll. The quorum required for a meeting of OneMarket Shareholders is two members present in person, or by attorney, corporate representative or proxy. Direct votes are not counted as part of the quorum.
WESTFIELD CORPORATION PROPOSAL // PAGE 91 SECTION 8 ADDITIONAL INFORMATION
(f) Dividends (j) Dividend reinvestment plan Under the OneMarket Constitution, the directors may OneMarket Limited may establish a dividend reinvestment determine or declare that a dividend is payable, fix the plan on any terms as the OneMarket Board resolves under amount and the time for payment, and determine the which OneMarket Shareholders may elect to apply the whole method of payment of the dividend to each OneMarket or part of a dividend from OneMarket Limited in subscribing Shareholder entitled to that dividend. The directors may for or purchasing OneMarket Shares. rescind or alter any such determination or declaration before payment is made. (k) Calls, forfeiture and liens OneMarket Limited has a first and paramount lien on If a dividend is paid, it will be paid in proportion to the every OneMarket Share for, among other things, all due number of OneMarket Shares held by a OneMarket and unpaid calls, and all money which OneMarket Limited Shareholder and, in the case of partly paid OneMarket is required by law to pay, and has paid, in respect of a Shares, in proportion to the percentage of the issue price OneMarket Share. that has been paid (excluding amounts credited and amounts paid in advance of a call). If a OneMarket Shareholder fails to pay a call in respect of any amount unpaid on any OneMarket Shares on the Interest is not payable in respect of any dividend. payment date specified, the company may give notice to (g) Transfer of OneMarket Shares that OneMarket Shareholder requiring payment of that call, OneMarket Shareholders may transfer OneMarket Shares together with any costs and interest that has accrued. If, in accordance with the ASX Settlement Operating Rules, after receiving notice, the call remains unpaid, the directors by instrument in writing in any form the directors approve, may by resolution forfeit the relevant OneMarket Shares. or by any other method of transfer of marketable securities The directors may sell, otherwise dispose of or re- required or permitted by the Corporations Act, ASX issue OneMarket Shares forfeited in this way, subject Settlement Operating Rules and ASX and approved by to compliance with the Corporations Act and the ASX the directors. Listing Rules. The OneMarket Directors may, if the ASX Listing (l) Indemnification Rules, the ASX Settlement Operating Rules and the OneMarket Limited may, to the maximum extent permitted OneMarket Constitution permit OneMarket Limited to by law, indemnify any current or former director, secretary, do so, request ASX Settlement Pty Limited to apply a officer or senior manager of OneMarket Limited or of a holding lock to prevent a transfer of OneMarket Shares subsidiary of OneMarket Limited against: from being registered or refuse to register a transfer of OneMarket Shares. —— any liability incurred by the person in that capacity (except for legal costs); (h) Issue of further OneMarket Shares —— legal costs incurred in defending legal proceedings in Subject to the Corporations Act and the ASX Listing which the person becomes involved because of that Rules, the issue of shares (including partly paid shares and capacity; and redeemable preference shares) in OneMarket Limited is —— legal costs incurred in good faith in obtaining legal under the control of the OneMarket Board. The OneMarket advice on issues relevant to the performance of that Board has the power to issue shares, options and other capacity, if that expenditure has been approved in securities convertible into shares to any person at any time accordance with OneMarket Limited’s policy. and for such consideration as it determines. Further, OneMarket Limited has entered into deeds of (i) Small holdings access, indemnity and insurance with each OneMarket While OneMarket Limited is listed, it may (unless the Director which confirm the director’s right of access OneMarket Shareholder notifies OneMarket otherwise during to board papers and require OneMarket Limited to the relevant notification period) sell the OneMarket Shares of indemnify the director for a liability incurred as an officer of a OneMarket Shareholder who holds less than a marketable OneMarket Limited or of any of its subsidiaries, subject to parcel of OneMarket Shares. OneMarket Limited must send the restrictions imposed by the Corporations Act and the the proceeds of sale to the OneMarket Shareholder within OneMarket Constitution. 60 days of the completion of the sale. (m) Winding up If OneMarket Limited is wound up, the liquidator may, with the sanction of a special resolution of OneMarket Shareholders, distribute among OneMarket Shareholders the whole or any part of the property of OneMarket Limited and may determine how to distribute the property as between OneMarket Shareholders or different classes of OneMarket Shareholders.
PAGE 92 // WESTFIELD CORPORATION PROPOSAL (n) OneMarket Directors’ fees (ii) materially violates a OneMarket policy or a written Under the OneMarket Constitution, the aggregate agreement or covenant with OneMarket Network LLC; remuneration of the Non-Executive OneMarket Directors is (iii) is convicted of, or enters a plea of guilty or nolo to be a yearly sum not exceeding the sum from time to time contendere to, a felony; determined by OneMarket Shareholders in general meeting. (iv) commits gross misconduct that is injurious to That sum has currently been fixed at A$1,800,000 per year. OneMarket Network LLC or commits any act of fraud, In addition, OneMarket Directors are entitled to be embezzlement or dishonest that is reasonably likely to reimbursed reasonable expenses incurred when engaged result in material injury to OneMarket Network LLC; or in the business of OneMarket and may be paid an additional (v) wilfully fails to cooperate with an investigation fee for performing additional or special duties. authorised by the board of OneMarket Network LLC or initiated by a government authority relating to 8.6 Key terms of Donald Kingsborough’s OneMarket. employment agreement The circumstances in which Mr Kingsborough may terminate The remuneration and other terms of employment for Donald his employment for Good Reason include where: Kingsborough, the Chief Executive Officer of OneMarket, are set out in written agreements with OneMarket Network (i) there is a material breach of the Employment LLC effective from the effective date of the Demerger Agreement by OneMarket Network LLC; (Employment Agreement). The Employment Agreement is (ii) there is a material reduction of Mr Kingsborough’s governed by the laws of the State of California. The key duties or responsibilities; terms of the Employment Agreement are set out below. (iii) there is a reduction in Mr Kingsborough’s annual base (a) Fixed remuneration salary, except where the reduction also applies to substantially all other similarly situated employees and Mr Kingsborough’s current annual salary is $1,400,000 does not exceed 10%; or reviewed annually. In addition, Mr Kingsborough is entitled to an annual housing allowance of $60,000 (net) along (iv) Mr Kingsborough’s primary work location is relocated with health insurance benefits and retirement benefit by more than 30 miles. contributions which are standard for US companies. If the termination of Mr Kingsborough’s employment is not a Qualified Termination, Mr Kingsborough will not be entitled (b) Termination to receive severance or other benefits. Mr Kingsborough’s employment is at will and may be Mr Kingsborough is eligible to participate in OneMarket terminated either by Mr Kingsborough or OneMarket Network LLC Short Term Incentives and Long-Term Network LLC at any time with or without advance cause Incentives. Details of Mr Kingsborough’s current awards or notice. under these plans are set out in section 4.12. If a “Qualified Termination” occurs, Mr Kingsborough will receive a lump sum payment equal to 100% of his base 8.7 Arrangements with Unibail-Rodamco salary and a payment representing health insurance benefits (a) OM Delaware investment agreements for a period of up to 12 months from the date of termination OM Delaware has entered into certain agreements with of Mr Kingsborough’s employment. Where the Qualified WCL Holdings, Inc (which following the Unibail-Rodamco Termination occurs during the period beginning 3 months Transaction will be a subsidiary of Unibail-Rodamco) prior to and ending 12 months following a change of control and OneMarket Limited which will be effective upon the event, then Mr Kingsborough will also receive 100% of his completion of the Demerger and, along with OM Delaware’s target bonus and any equity awards that Mr Kingsborough certificate of incorporation and by-laws, contain specific has immediately vest and, in the case of options or stock rights, obligations and agreements (including provisions appreciation rights, become exercisable. related to the composition of its board of directors) of A “Qualified Termination” will occur if: these parties as owners of OM Delaware’s common stock, (i) Mr Kingsborough’s employment is terminated by as described more fully below. Each of the agreements OneMarket Network LLC without “Cause”; summarised in this section 8.7(a) is governed by the laws (ii) termination is by reason of Mr Kingsborough’s death of the State of Delaware. or disability; or (i) Certificate of Incorporation (iii) Mr Kingsborough terminates his employment with OM Delaware is a corporation organised and existing under OneMarket Network LLC for Good Reason. the laws of the State of Delaware. The circumstances in which OneMarket Network LLC may OM Delaware is authorised to issue up to 20,000,000 terminate Mr Kingsborough’s employment for “Cause” common stock with par value of $0.001 per share with each include where Mr Kingsborough: shareholder entitled to one vote for each share held. (i) continues to wilfully fail to perform his duties, after From the effective date of the Demerger and until the earlier receiving written notice of such failure; of (i) the date on which WCL Holdings, Inc or an affiliate of WCL Holdings, Inc, in aggregate, no longer directly or
WESTFIELD CORPORATION PROPOSAL // PAGE 93 SECTION 8 ADDITIONAL INFORMATION
indirectly owns at least 5% of the outstanding shares of Directors and officers capital stock of OM Delaware as determined in accordance Regular meetings of the board of directors may be held with the WCL Holdings, Inc Ownership Calculation without notice at such time and at such place as shall from (described below), and (ii) the closing of OM Delaware’s first time to time be determined by the board of directors. A firm commitment underwritten public offering of the common special meeting of the board may be called at any time by stock registered under the US Securities Act, the following the chairperson of the board, president, secretary or by any actions will require the approval of WCL Holdings, Inc: two directors. At all meetings of the board, a majority of the —— Any amendment to the certificate of incorporation total number of directors shall constitute a quorum for the of OM Delaware if such action would adversely alter transaction of business. Each director is entitled to one vote the rights, preferences, privileges or powers of, or at any board meeting. The board has the authority to fix the restrictions provided for the benefit of WCL Holdings, compensation of directors. The board may designate one Inc in a manner materially different from other holders or more committees consisting of directors of OM Delaware. of common stock. The officers of OM Delaware shall be a president and —— Any entry into any transaction, agreement or a secretary. arrangement with OneMarket Limited (subject to Indemnification certain customary exceptions). OM Delaware shall indemnify, to the fullest extent permitted —— Any amendment to section 6.2 of the OM Delaware by applicable law and subject to conditions, any director certificate of incorporation. or officer of OM Delaware and shall have the power to OM Delaware will initially have four directors. indemnify any employee or agent of OM Delaware, in each “WCL Holdings, Inc Ownership Calculation” means a case, for any proceedings or threatened proceedings fraction, expressed as a percentage, (i) the numerator of because he or she is or was a director, officer, employee or which is the total number of shares of capital stock of OM agent of OM Delaware, or is or was serving at the request Delaware (on an as-converted basis) directly or indirectly of OM Delaware in a position at another entity. owned (of record or beneficially) by WCL Holdings, Inc or any Affiliates of WCL Holdings, Inc, in aggregate, as Stock determined on the applicable calculation date and (ii) the The shares of OM Delaware shall be represented by denominator of which is the sum of (x) the total number of certificates, provided that the board of directors may provide outstanding shares of capital stock of OM Delaware as of by resolution or resolutions that some or all of any or all the effective date of the Demerger (the Initial Date), plus classes or series of its stock shall be uncertificated shares. (y) the total number of New Securities (as defined in the The board may, subject to restrictions and applicable Investors’ Rights Agreement) issued (on an as-converted law, declare and pay dividends upon the shares of OM basis) after the Initial Date as determined on the applicable Delaware’s capital stock. calculation date. (iii) Investors’ Rights Agreement (ii) OM Delaware’s Bylaws OM Delaware has entered into the Investors’ Rights OM Delaware’s Bylaws set out how OM Delaware Agreement under which Unibail-Rodamco (through WCL will operate and the duties and responsibilities of the Holdings, Inc) and OneMarket Limited will be entitled to stockholders, directors and officers. rights with respect to the registration of their shares under the US Securities Act, financial information of OM Delaware Meetings and pre-emptive rights. Unless directors are elected by written consent in lieu of an annual meeting, an annual meeting of stockholders shall be Registration rights held for the election of directors at such date and time as Upon OM Delaware’s first firm commitment underwritten designated by the board of directors. A special meeting of public offering of its common stock, registered under the stockholders may be called at any time by the board, the US Securities Act (the IPO), WCL Holdings, Inc and chairperson of the board, president or by one or more OneMarket Limited, subject to certain limitations set forth stockholders holding shares in the aggregate entitled to cast in the Investors’ Rights Agreement, will be entitled to certain not less than 20% of the votes at that meeting. A quorum S-1 and S-3 registration rights on one or more occasions, for a meeting will be constituted when the holders of shares including the right of WCL Holdings, Inc to request that OM of stock having a majority of the votes which could be cast Delaware effect one registration with respect to all of its by the holders of all outstanding shares of stock entitled to Registrable Securities (as defined in the Investors’ Rights vote at the meeting are present. OM Delaware stockholders Agreement) owned, directly or indirectly. In addition, if OM are entitled to one vote for each share of capital stock held Delaware proposes to register the offer and sale of its by the stockholder which has voting power on the matter common stock under the US Securities Act, WCL Holdings, in question. Inc and OneMarket Limited will be entitled to certain “piggyback” registration rights allowing the holders to include their shares in such registration, subject to certain marketing and other limitations set forth in the Investors’ Rights
PAGE 94 // WESTFIELD CORPORATION PROPOSAL Agreement. OM Delaware will pay the registration expenses Holdings, Inc Ownership Calculation or if the Network of WCL Holdings, Inc and OneMarket Limited of the shares Participation Agreement between WCL Holdings, Inc registered pursuant to the registrations described above. and OM Delaware is terminated by (i) WCL Holdings, Inc (subject to certain exceptions set forth in the Voting Financial information Agreement) or (ii) OneMarket Limited if WCL Holdings, WCL Holdings, Inc and OneMarket Limited are entitled to Inc is in material breach of the terms of the Network certain financial information, including annual and half yearly Participation Agreement and WCL Holdings, Inc fails to financial reports for as long as they own at least 5% of the cure such breach within the time period established in outstanding shares of capital stock of OM Delaware, which the Voting Agreement; and for the purposes WCL Holdings, Inc, shall be determined —— any additional directors chosen by holders of a majority in accordance with the WCL Holdings, Inc Ownership of the common stock of OM Delaware. Calculation (described in section (8.7(a)(i) above). OneMarket Limited shall have the right to increase the size OneMarket Limited and WCL Holdings, Inc’s rights of the board of directors and, so long as OneMarket Limited to financial information will terminate following OM owns a majority of the common stock of OM Delaware, Delaware’s IPO. designate any additional members of the board of directors. Pre-emptive rights If OneMarket Limited agrees to sell or exchange all of its shares of capital stock of OM Delaware to or with an WCL Holdings, Inc and OneMarket Limited are entitled unaffiliated third party pursuant to a Change of Control to purchase their pro rata share of any New Securities Transaction (as defined in the Voting Agreement) approved (as defined in the Investors’ Rights Agreement) offered by by the board of directors, WCL Holdings, Inc, if requested by OM Delaware for so long as they own at least 5% of the OneMarket Limited will be required to vote in favour of such outstanding shares of capital stock of OM Delaware (or 5% transaction and sell its shares to the third party on the same of the outstanding shares of capital stock of OM Delaware, terms that are applicable to OneMarket Limited, subject to as determined in accordance with the WCL Holdings, Inc customary exceptions. Ownership Calculation, in the case of WCL Holdings, Inc), subject to certain exceptions as set forth in the Investors’ The Voting Agreement shall terminate upon the earlier Rights Agreement. of OM Delaware’s IPO, a change of control transaction or by the mutual agreement of WCL Holdings, Inc and In addition, in the event that OneMarket Limited loans funds OneMarket Limited. to OM Delaware, WCL Holdings, Inc has the right to loan its pro rata share of funds to OM Delaware on the same terms (v) Stockholders’ Agreement and conditions as the loan from OneMarket Limited. Any OM Delaware has entered into the Stockholders’ Agreement loan from WCL Holdings, Inc and OneMarket Limited to OM with WCL Holdings, Inc and OneMarket Limited. Delaware must be on arm’s length terms or less favourable Under the Stockholders’ Agreement, if WCL Holdings, Inc to WCL Holdings, Inc and OneMarket Limited than arm’s or its Affiliates wishes to sell any shares of its common length terms. stock of OM Delaware to any third party, it must offer OneMarket Limited and Unibail-Rodamco’s pre- OneMarket Limited the right to purchase such shares. If emptive rights shall terminate immediately prior to OM OneMarket Limited makes an offer to purchase the shares Delaware’s IPO. that WCL Holdings, Inc rejects, WCL Holdings, Inc can sell (iv) Voting Agreement its shares to a third party at a price no lower than OneMarket Limited’s offer. OM Delaware has entered into the Voting Agreement under which Unibail-Rodamco (through WCL Holdings, Inc) and If OneMarket Limited agrees to sell or exchange all of OneMarket Limited have agreed to vote all of their shares its shares of capital stock of OM Delaware to or with an in OM Delaware to ensure that the composition of OM unaffiliated third party, WCL Holdings, Inc agrees if so Delaware’s board of directors complies with the provisions requested by OneMarket Limited to sell or exchange all of the Voting Agreement. shares of capital stock of OM Delaware held by WCL Holdings, Inc and its Affiliates at the same price and on the WCL Holdings, Inc and OneMarket Limited must vote their same terms at which OneMarket Limited proposes to sell to OM Delaware shares in such manner as may be necessary such third party, subject to customary exceptions. to elect as members of OM Delaware’s board of directors: If OneMarket Limited is intending to sell such number of —— three directors chosen by OneMarket Limited; shares of common stock of OM Delaware to a third party —— as of and conditioned upon entry into a Network purchaser which results in OneMarket Limited owning less Participation Agreement (as defined in the Voting than 50% of OM Delaware, WCL Holdings, Inc has the right Agreement), one director chosen by WCL Holdings, to participate in the sale and sell all of its shares of common Inc provided that WCL Holdings, Inc’s right to stock of OM Delaware to such third party purchaser at the designate one director will cease (and it must procure same price and on the same terms at which OneMarket that its director resigns) if WCL Holdings, Inc ceases Limited proposes to sell to such purchaser. to own at least 5% of the outstanding shares of OM Delaware as determined in accordance with the WCL
WESTFIELD CORPORATION PROPOSAL // PAGE 95 SECTION 8 ADDITIONAL INFORMATION
If OM Delaware has not completed an IPO or Change of Under each of the Investors’ Rights Agreement, Voting Control (as defined in the Stockholders’ Agreement) within Agreement and the Stockholders’ Agreement, if OM three years from the date of the Stockholders’ Agreement Delaware offers securities to mall owners or operators, (being 6 April 2018), WCL Holdings, Inc has the right to the mall owners or operators generally cannot have more cause OneMarket Limited to purchase all of its OM Delaware favourable rights than those provided to WCL Holdings, Inc shares in exchange for the number of ordinary shares in unless WCL Holdings, Inc had an opportunity to purchase OneMarket Limited that have a market value equal to the such securities as well or such mall operator owns a number market value of all of WCL Holdings, Inc’s OM Delaware of shares of capital stock of OM Delaware that is more than shares. WCL Holdings, Inc can exercise this right by giving the number of shares of capital stock owned WCL Holdings, written notice to OneMarket Limited at any time during the Inc and its affiliates on the date of issuance of the securities. five day business period prior to any 31 March, 30 June, (vi) Expense Payment Agreement with OM Delaware 30 September or 31 December following the expiration of Expenses the three year period. OneMarket Limited has entered into the Expense Payment If the OM-UR NPPA (as defined in the Stockholders’ Agreement with OM Delaware under which, on and from Agreement) has been terminated prior to the date of the 1 January 2018, OM Delaware will pay or reimburse Stockholders’ Agreement, and no replacement Network OneMarket Limited for all reasonable and customary Participation and Partnership Agreement has been entered expenses reasonably incurred the ordinary course of into within 18 months of the date of termination of such operating a public company in Australia whose sole business agreement then OneMarket Limited may purchase all shares is ownership of shares in OM Delaware, including any taxes of common stock in OM Delaware held by WCL Holdings, to the extent any tax is payable as a result of payment or Inc and its Affiliates. OneMarket Limited can exercise this reimbursement by OM Delaware of an expense. right by providing written notice to WCL Holdings, Inc at any time during the five day business period prior to OM Delaware is only obligated to pay the Expenses (as any 31 March, 30 June, 30 September or 31 December. defined in the Expense Payment Agreement) and shall OneMarket Limited can purchase such shares for an amount have no obligation to pay any expense if the payment or in cash equal to the number of shares of common stock of reimbursement of such expense violates any law. OM Delaware owned by WCL Holdings, Inc multiplied by the Term market value of an OM Delaware share. The Expense Payment Agreement shall terminate upon Between the date of the Stockholders’ Agreement and the the earlier of (i) the delisting of OneMarket Limited from the earlier of the Exchange Completion Date (as defined in the ASX and (ii) OneMarket Limited ceasing to own shares of Stockholders’ Agreement) and the Purchase Completion capital stock of OM Delaware. OneMarket Limited may also Date (as defined in the Stockholders’ Agreement), terminate the Expense Payment Agreement by written notice OneMarket Limited shall not engage in any activity other at any time. than the ownership of shares or debt securities of OM Delaware or its Affiliates (except as may be otherwise agreed (vii) Board Observer Letter between the parties). OneMarket Limited shall not own any OM Delaware has provided the Board Observer Letter equity interest or indebtedness of any other person or have to WCL Holdings, Inc to confirm that, effective on the any strategic relationships, ventures, agreements or other Demerger, WCL Holdings, Inc is provided the right to arrangements with entities that are engaged in the business designate a senior executive of WCL to be an observer on of OM Delaware. OM Delaware’s board. Subject to certain exceptions, the For the purposes of the Stockholders’ Agreement, the observer shall be entitled to attend all board meetings and market value of a OneMarket Limited share is equal to the meetings of board committees and be provided with all 30-day volume weighted average traded price of OneMarket materials that are provided to directors. Limited on the ASX. The market value of an OM Delaware WCL Holdings, Inc’s right to appoint the observer will exist share is equal to: until it is entitled to nominate a director to OM Delaware’s —— the market value of a OneMarket Limited share board under the Voting Rights Agreement. Should WCL multiplied by the total number of OneMarket Limited Holdings, Inc’s right to nominate a director to OM Delaware’s shares outstanding; board end, WCL Holdings, Inc’s right to appoint the observer will be reinstated. —— divided by: WCL Holdings, Inc and its representatives must hold in —— the total number of OM Delaware shares confidence and trust all information received in relation to its owned by OneMarket Limited divided by the right to appoint the observer. Further, OM Delaware shall use total number of OneMarket Limited shares commercially reasonable efforts to cover the observer under outstanding; its existing director and officer indemnity insurance, provided —— divided by the number of shares of common that there is no additional cost to OM Delaware, and shall stock of OM Delaware outstanding. indemnify the observer on the same terms as OM Delaware does its directors.
PAGE 96 // WESTFIELD CORPORATION PROPOSAL The Board Observer Letter will terminate on the closing of Management LLC for a period of 12 months, for the sale of OM Delaware’s securities in relation to an initial the purpose of evaluating the products. Westfield public offering, when OM Delaware becomes subject to Property Management LLC granted OneMarket a the periodic reporting requirement under the US Securities non-exclusive, royalty-free license and right for the Exchange Act of 1934, as amended or when WCL Holdings, period of 12 months, to use their data. The license is Inc and its affiliates hold less than 2.5% of the outstanding for the purposes of OneMarket providing products in shares of capital stock of OM Delaware as determined the United States. Westfield Property Management in accordance with the WCL Holdings, Inc Ownership LLC may only assign its licence in the products to Calculation. Westfield Affiliates. (b) Service agreements and pilot agreements with —— the second is with Westfield Airports LLC. Under Westfield this agreement OneMarket granted to Westfield Core Digital Services Airports LLC a non-exclusive right to access and use SaaS Services and Software for the operation OneMarket Network LLC has entered into a digital services of OneMarket’s Live Receipts product at Los Angeles agreement with Westfield Property Management LLC and International Airport (LAX) for a term of 6 months. The Westfield Europe Limited under which OneMarket Network individual businesses within the airport must enter LLC transferred and assigned all intellectual property into a separate agreement in relation to the product rights relating to Westfield’s core digital services program with OneMarket. Westfield Airports LLC granted to (including mobile app, consumer website, customer OneMarket an irrevocable, non-exclusive, royalty-free relationship platform, mapping platform, global publishing licence to use their data for 6 months. Subject to platform, DNS and domain management, accounts (people agreement by the individual businesses, OneMarket access service) and corporate site) to Westfield Property will also be granted the right to use their data in Management LLC, granted Westfield Property Management connection with the provision of the product. LLC a non-exclusive, royalty-free licence in respect of OneMarket’s mapping platform and people access services (c) Unibail-Rodamco Network Participation Agreement and agreed to provide transitional support to Westfield OneMarket Network, LLC (OMN), a wholly owned subsidiary Property Management LLC and Westfield Europe Limited in of OM Delaware, and Westfield Property Management, connection with the migration of development, maintenance, LLC (Westfield Property) have entered into a Network management, operational and other related services Participation and Partnership Agreement (Westfield NPA) previously provided by OneMarket Network LLC to Westfield effective on 1 July 2018, pursuant to which, subject to Property Management LLC and Westfield Europe Limited. certain conditions described below, OMN provides certain Digital Suite of Services digital and technology products and services to Westfield OneMarket Network LLC has entered into a digital services Property for Westfield venues in the United States and agreement with Westfield Property Management LLC and United Kingdom based on Westfield’s needs by way of the Westfield Europe Limited under which OneMarket Network OneMarket network program (OneMarket Network). The LLC transferred and assigned all intellectual property rights Westfield NPA is a master services agreement under which relating to Westfield’s digital directory software to Westfield the parties may negotiate separate addenda setting the Property Management LLC, granted Westfield Property particular products and services to be provided by OMN and Management LLC a non-exclusive, royalty-free licence in any specific terms applying to those products and services. respect of OneMarket’s smart parking services and indoor Under the Westfield NPA, Westfield Property is given access positioning (also referred to as “mobile positioning module”) to the OneMarket Network, and the particular products services and agreed to provide transitional support to currently made available to Westfield Property are the Westfield Property Management LLC and Westfield Europe Shopper Exchange product and elements of the Shopper Limited in connection with the migration of development, Intelligence and Shopper Profile Products. In addition, when maintenance, management, operational and other related available Westfield Property may choose to receive additional services previously provided by OneMarket Network LLC services which include Live Receipts, a network digital to Westfield Property Management LLC and Westfield assistant pilot and the Intelligent Parking Technology product. Europe Limited. With respect to the Intelligent Parking Technology product, Pilot agreements the Westfield NPA includes a term sheet under which the parties agree to negotiate in good faith an agreement for OneMarket has entered into two pilot agreements with Westfield Property to sign up for OneMarket’s Intelligent Westfield: Parking Technology product by 15 April 2018. The products —— the first is with Westfield Property Management LLC. must be offered to Westfield Property on terms no less Under this agreement OneMarket granted to Westfield favourable (with respect to fees) than those offered to any Property Management LLC a non-exclusive licence other mall venue owner with comparable sized properties. and right to install and use the Shopper Intelligence Pursuant to the Westfield NPA, Westfield Property will and Shopper Profile products. The licence is for provide OMN with certain data (Company Data) and OMN use in connection with certain venues in the United will use the Company Data provided by Westfield Property States that are managed by Westfield Property to provide the relevant services.
WESTFIELD CORPORATION PROPOSAL // PAGE 97 SECTION 8 ADDITIONAL INFORMATION
Shopper Intelligence/Shopper Profile OMN with 1 year’s written notice or it may terminate OMN will provide Westfield Property with elements of the the Westfield NPA by giving 1 month’s written notice Shopper Intelligence and Shopper Profile products. Under if OMN has not fulfilled certain conditions. this product service certain data intelligence products, —— (Conditions) The Westfield NPA is conditional on OMN based on Company Data in relation to Westfield Property’s fulfilling certain conditions. Until the conditions are customers, will be accessible to Westfield Property through satisfied, Westfield Property will have no obligations a secure online portal. The products include aggregated under the Westfield NPA and if the conditions are not customer behaviour metrics and benchmarks (including, satisfied by 1 January 2019 Westfield Property may among other things, customer dwell patterns, physical terminate the Westfield NPA. customer behaviour, demographics and spend profiles), —— (Collaborations) Westfield Property and OMN will as well as downloadable shopper profiles in respect of cooperate in good faith to enter into mutually beneficial Westfield Property’s customers who have a pre-existing collaborations for new initiatives for developing services contractual relationship with Westfield Property (e.g. loyalty that can be provided on OMN’s platform in the area membership), have joined a venue’s Wi-Fi login, or have of digital or other technology marketing services been provided by the venue to OneMarket as a visitor to the and programs. The opt-in process for Westfield venue’s website or mobile application. Westfield Property Property’s customers and any revenue associated will receive 25 hours of specialist support per quarter for the with the opt-ins will be mutually agreed between the products at no additional cost. As part of these services, the parties. OMN also agrees to invite Westfield Property parties will agree on physical signage to be installed by the to conduct various OMN innovation trials at Westfield Westfield Property in venues to inform customers of data Property’s venues. collection and how to opt-out of such data collection. —— (Right to suspend) OMN may immediately suspend In order to receive this product service, Westfield Property Westfield Property’s access to the OneMarket Network must provide in-venue location data, mapping data, and Westfield Property may immediately suspend customer relationship management data and digital property OMN’s access to the Company Data, in each case, (online) activity data and may, if it so chooses, provide loyalty under certain circumstances including if the non- data, transaction data and product/service data. terminating party is violating the Westfield NPA. Shopper Exchange —— (Fees) Westfield Property will pay OMN certain The Shopper Exchange product service involves Westfield fees for participation and access to the OneMarket Property supplying OMN with Company Data and OMN Network, the Shopper Intelligence product and the operating the Shopper Exchange and using the Company Shopper Exchange product. The fees vary depending Data to launch digital advertising campaigns on behalf of on the location and floor space of the participating advertisers targeted at Westfield Property’s customers. OMN centres. Fees will only be payable under the Westfield may, if applicable, provide click links to Westfield Property’s NPA if OMN has fulfilled certain conditions and met website in the advertisements. OMN and Westfield Property certain minimum performance thresholds. will also work to create opportunities and programs for —— (Payment–Shopper Exchange) OMN will collect advertisers to purchase advertising on the OneMarket revenue from third party advertisers that pay for Network based on Company Data. advertising that is displayed through the OneMarket In order to receive the Shopper Exchange service, Westfield Shopper Exchange Service, and will pay to Westfield Property must provide in-venue location data, mapping data, Property a percentage of the net margin (being customer relationship management data and digital property the total gross receipts that OMN receives from (online) activity data and may, if it so chooses, provide loyalty each campaign that exclusively leverages Westfield data, transaction data and product/service data. Property’s Company Data minus the cost of delivering Key terms and conditions advertising) at the end of each calendar quarter. OMN will agree to fund a test program (up to $10,000) that The key terms of the Westfield NPA are as follows: promotes a unique shopper proposition that leverages —— (Term and launch date) The term of the Westfield NPA the partnership between the parties and drives traffic commenced upon execution and continues for a to a product linked to the OneMarket Network. period of 3 years from 1 July 2018. Westfield Property If Westfield Property wishes to run any additional may extend the term for an additional 2 years at its campaigns and otherwise advertise on the OneMarket sole discretion. Westfield Property will use reasonable Network, Westfield Property must pay rates negotiated efforts to commence providing Company Data to OMN by the parties. by 1 July 2018 and OMN will launch the Shopper —— (Indemnities) Each party agrees to indemnify the other Intelligence product by 1 October 2018, or such other for losses, including reasonable costs and expenses, date agreed upon by the parties. incurred by such indemnified party arising out of certain —— (Termination) Either party may terminate the Westfield categories of conduct by the indemnifying party. NPA for the other party’s uncured material breach. Westfield Property may terminate the Westfield NPA at any time after the first year of the term by providing
PAGE 98 // WESTFIELD CORPORATION PROPOSAL —— (Limitations of liability) Subject to certain limited carve In January 2018 the former 12 Digit stockholders notified outs, the Westfield NPA provides that neither party OneMarket of their belief that certain changes have occurred to is liable for certain damages arising out of or related the operation of the 12 Digit business since the February 2017 to the Westfield NPA, and otherwise limits each acquisition that could materially and adversely impact the ability party’s total aggregate liability for claims under the of the former stockholders to earn the contingent consideration. Westfield NPA. OneMarket has informed the 12 Digit stockholders that it does —— (Security) The Westfield NPA includes certain security not believe there has been any such changes to the operation obligations placed on OMN and Westfield Property of the 12 Digit business and that it does not believe any regarding protecting the other party’s data. modification to the contingent consideration terms is required. The parties held an initial meeting to discuss the issue but did —— (Privacy warranties) Each party gives certain privacy- not reach agreement on any modification to the contingent related warranties relevant to the subject matter of the consideration terms. On 15 March 2018 the parties met to Westfield NPA. attempt to resolve the dispute by mediation. The mediation The Westfield NPA also includes relatively standard boiler did not resolve the dispute and the 12 Digit stockholders plate provisions (including confidentiality provisions and have notified OneMarket that they wish to exercise their right provisions concerning compliance with the requirements to submit the dispute to binding arbitration. Any modification of European laws and regulations relating to personal data). to the contingent payment terms, whether as a result of an 8.8 12 Digit contingent consideration agreement through mediation or through arbitration, could result in a modification to the manner in which the contingent OneMarket acquired 12 Digit in February 2017 for a consideration is calculated but cannot increase the maximum purchase price of $40 million (prior to adjustments) plus $85 million aggregate contingent consideration that might be contingent consideration. Under the terms of the 12 Digit payable under the 12 Digit Acquisition Agreement. Acquisition Agreement, the former stockholders of 12 Digit and certain former employees of 12 Digit have the 8.9 Independent Expert right to receive additional contingent consideration of up Grant Samuel & Associates Pty Limited has prepared the to $85 million if certain financial targets are achieved. The Independent Experts Report set out in Annexure A of this amount of contingent consideration payable, if any, is to be Demerger Booklet advising as to whether, in its opinion, the calculated annually at the end of each of the calendar years Demerger is in the best interests of Westfield Shareholders. 2017 to 2020 based on gross revenue (for 2017) and after The Independent Expert has concluded that the Demerger tax profit (for 2018, 2019 and 2020) of the 12 Digit business, is in the best interests of Westfield Shareholders. The as defined and calculated for the purposes of the 12 Digit Independent Expert has also concluded that, in its opinion, Acquisition Agreement. Under no circumstances can the the Capital Reduction will not materially prejudice Westfield’s aggregate additional contingent consideration payable ability to pay its existing creditors. pursuant to the 12 Digit Acquisition Agreement exceed $85 million. 8.10 Consents For the year ended 31 December 2017 the parties have The following parties have given and have not withdrawn, agreed that the contingent consideration for the 2017 year before the registration of this Demerger Booklet by ASIC, is approximately $0.5 million. their written consent to be named in this Demerger Booklet The 12 Digit Acquisition Agreement further gives certain in the form and context in which they are named: former stockholders the right to propose a modification —— King & Wood Mallesons as legal adviser to Westfield; to the contingent consideration calculation if they believe —— Rothschild as financial advisor to Westfield; in good faith that any changes to the annual budget or the operation of 12 Digit by OneMarket will materially and —— Grant Samuel & Associates Pty Ltd as Independent adversely impact the ability of the former stockholders to Expert; earn the contingent consideration. Upon notice of such a —— Ernst & Young as auditor of OneMarket; belief, OneMarket and the former stockholders are required —— Ernst & Young Transaction Advisory Services Limited to work together in good faith to determine any required as Investigating Accountant; and modification to the contingent payment terms. In the event —— Computershare Investor Services Pty Limited the former stockholders and OneMarket cannot reach as Westfield’s Share Registry and OneMarket’s agreement on any modifications, the former stockholders Share Registry. have the right to submit the dispute to mediation and, if resolution is not achieved through that process, to binding Grant Samuel & Associates Pty Ltd has also given and arbitration, in each case conducted in accordance with has not withdrawn, before the time of registration of this Californian procedures. The 12 Digit Acquisition Agreement Demerger Booklet with ASIC, its written consent to the provides that such mediation and arbitration can occur inclusion of its Independent Expert’s Report in this Demerger only once per year during the term for the calculation of the Booklet in the form and context in which it is included and to contingent consideration and will be the sole and exclusive all references in this Demerger Booklet to that Report in the remedy for the resolution of any conflicts concerning any form and context in which they appear. modification to the contingent payment terms.
WESTFIELD CORPORATION PROPOSAL // PAGE 99 SECTION 8 ADDITIONAL INFORMATION
Ernst & Young Transaction Advisory Services Limited This Demerger Booklet does not constitute an offer of has also given and has not withdrawn, before the time OneMarket Shares in any jurisdiction in which it would be of registration of this Demerger Booklet with ASIC, its unlawful. In particular, this Demerger Booklet may not be written consent to the inclusion of its Independent Limited distributed to any person, and the OneMarket Shares may Assurance Report in this Demerger Booklet in the form and not be offered or sold, in any country outside Australia and context in which it is included. New Zealand except to the extent provided below. 8.11 Disclaimers (a) Bahamas None of the persons referred to in section 8.10 have This Demerger Booklet is not available for distribution to the authorised or caused the issue of this Demerger Booklet public in The Bahamas, nor are the OneMarket Shares being and do not make or purport to make any statement in this publicly offered in The Bahamas. This Demerger Booklet is Demerger Booklet other than those statements made in not directed to persons resident in The Bahamas other than the capacity and to the extent the person has provided its Westfield Shareholders with registered addresses in The consent, as referred to above. Bahamas, and any other use, distribution or transmission To the maximum extent permitted by law, each person in or into The Bahamas is unauthorised. referred to in section 8.10 disclaims all liability in respect Neither this Demerger Booklet nor any other offering or of, makes no representation regarding and takes no marketing material relating to the OneMarket Shares have responsibility for, any part of this Demerger Booklet other been or will be registered or filed with or approved by any than as described in this section with that person’s consent. regulatory authority in The Bahamas. 8.12 Demerger costs and fees (b) Canada Under the Demerger Implementation Agreement, Westfield The OneMarket Shares will be transferred by Westfield Corporation and OneMarket Limited have agreed that the Corporation in reliance upon exemptions from the costs in connection with the Demerger will be borne equally prospectus and registration requirements of the applicable between Westfield Corporation and OneMarket, save that Canadian securities law in each province and territory of Westfield Corporation’s liability in respect of such costs will Canada. be capped at A$2.5million. No securities commission in Canada has reviewed or in The total costs of the Demerger are estimated to be any way passed upon this document or the merits of the approximately US$4.5 million, of which OneMarket Limited’s Demerger. share will be US$2.5 million. These costs relate to a range of (c) China activities associated with the Demerger, including advisory fees, restructuring costs, IT costs, listing and administrative This Demerger Booklet does not constitute a public offer of fees. As at the date of this Demerger Booklet approximately OneMarket Shares, whether by way of sale or subscription, US$3.1 million in costs have been incurred in connection in the People’s Republic of China (excluding, for purposes with the Demerger. of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan). The fee for professional services paid or payable to: The OneMarket Shares may not be offered or sold directly —— financial advisors is approximately US$0.6 million; or indirectly in the PRC to legal or natural persons other —— lawyers is approximately US$1.8 million; than directly to “qualified domestic institutional investors”, —— accounting and tax advisors is approximately sovereign wealth funds and quasi-government investment US$1.1 million; funds. —— other experts (including Grant Samuel) is approximately (d) France US$0.4 million; and This Demerger Booklet has not been, and will not be, —— communications consultants (including the OneMarket approved by, filed with, or registered with, the French Share Registry) is approximately US$0.6 million. financial markets authority (Autorité des Marchés Financiers, AMF), accordingly, this Demerger Booklet does not 8.13 Foreign jurisdictions constitute a prospectus within the meaning of Directive The distribution of this Demerger Booklet outside of Australia 2003/71/EC (as amended) (the Prospectus Directive) as and New Zealand may be restricted by law and persons implemented in the French Financial and Monetary Code who come into possession of it should seek advice on (Code monétaire et financier). An offer to the public of and observe any such restrictions. Any failure to comply OneMarket Shares has not been made, and shall not be with such restrictions may contravene applicable securities made, in France except pursuant to one or more of the law. Westfield disclaims all liabilities to such persons. following exemptions under the Prospectus Directive as Westfield Shareholders who are nominees, trustees or implemented in France: custodians are encouraged to seek independent advice as —— The total amount of such offer in the European Union to how they should proceed. No action has been taken to is less than EUR 100,000 or the foreign currency register or qualify this Demerger Booklet or any aspect of equivalent thereof; the acquisition in any jurisdiction outside of Australia and New Zealand.
PAGE 100 // WESTFIELD CORPORATION PROPOSAL —— The total amount of such offer in the European Union —— to any person or entity who has requested to be is between EUR 100,000 and EUR 5,000,000 or the treated as a professional client in accordance with the foreign currency equivalent thereof and such offer EU Markets in Financial Instruments Directive (Directive concerns financial securities accounting for no more 2014/65/EC) (MiFID II); than 50% of the capital of the issuer; —— to any person or entity who is recognised as an eligible —— Such offer is intended for investors acquiring at least counterparty in accordance with Article 30 of the EUR 100,000 worth, or the foreign currency equivalent MiFID II; thereof, per investor and per transaction, of the —— to fewer than 150 natural or legal persons (other than relevant financial securities; qualified investors within the meaning of Article 2(1) —— Such offer concerns financial securities with a (e) of the Prospectus Directive), subject to the prior minimum par value of at least EUR 100,000 or the consent of Westfield Corporation; or foreign currency equivalent thereof; or —— in any other circumstances falling within Article 3(2) of —— Such offer is exclusively intended for the following the Prospectus Directive, provided that no such offer entities or individuals: entities providing portfolio of OneMarket Shares shall result in a requirement for management services for third parties, or professional the publication by either of Westfield Corporation or clients (within the meaning of Article L. 533-16 of OneMarket Limited of a prospectus pursuant to Article the French Monetary and Financial Code), or eligible 3 of the Prospectus Directive. counterparties (within the meaning of Article L. 533- 20 of the French Monetary and Financial Code), or (f) Hong Kong a restricted circle of investors made of less than 150 WARNING – The contents of this Demerger Booklet have investors, provided that such investors are acting for not been reviewed or approved by any regulatory authority their own account. in Hong Kong. You are advised to exercise caution in relation to the Demerger. If you are in any doubt about any The person or entity making such an offer shall inform of the contents of this Demerger Booklet, you should obtain investors participating in the offer that: independent professional advice. —— The offer does not require a prospectus to be This Demerger Booklet does not constitute an offer or submitted for approval to the AMF; invitation to the public in Hong Kong to acquire or subscribe —— Persons or entities referred to in 2°, Section II of Article for or dispose of any securities. This Demerger Booklet L. 411-2 of the French Monetary and Financial Code also does not constitute a prospectus (as defined in section may take part in the offer solely for their own account, 2(1) of the Companies (Winding Up and Miscellaneous as provided in Articles D. 411-1, D. 411-2, D. 734- Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong)) 1, D. 744-1, D. 754-1 and D. 764-1 of the French or notice, circular, brochure or advertisement offering any Monetary and Financial Code; securities to the public for subscription or purchase or —— The financial securities thus acquired cannot be calculated to invite such offers by the public to subscribe distributed directly or indirectly to the public otherwise for or purchase any securities, nor is it an advertisement, than in accordance with Articles L. 411-1, L. 411-2, invitation or document containing an advertisement or L. 412-1 and L. 621-8 to L. 621-8-3 of the French invitation falling within the meaning of section 103 of the Monetary and Financial Code. Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong). (e) Germany Accordingly, unless permitted by the securities laws of The information in this document has been prepared on Hong Kong, no person may issue or cause to be issued the basis that all offers of OneMarket Shares will be made this Demerger Booklet in Hong Kong, other than to persons pursuant to an exemption under the Directive 2003/71/ who are “professional investors” as defined in the Securities EC (Prospectus Directive), as amended and implemented and Futures Ordinance and any rules made thereunder or in Germany, from the requirement to produce a prospectus in other circumstances which do not result in the document for offers of securities. being a “prospectus” as defined in the Companies (Winding An offer to the public of OneMarket Shares has not been Up and Miscellaneous Provisions) Ordinance or which do made, and shall not be made, in Germany except pursuant not constitute an offer to the public within the meaning of to one or more of the following exemptions under the the Companies (Winding Up and Miscellaneous Provisions) Prospectus Directive as implemented in Germany: Ordinance. —— to any legal entity that is authorized or regulated No person may issue or have in its possession for to operate in the financial markets or whose main the purposes of issue, this Demerger Booklet or any business is to invest in financial instruments; advertisement, invitation or document relating to these —— to any legal entity that satisfies two of the following securities, whether in Hong Kong or elsewhere, which three criteria: (i) balance sheet total of at least is directed at, or the contents of which are likely to be €20,000,000; (ii) annual net turnover of at least accessed or read by, the public in Hong Kong (except €40,000,000 and (iii) own funds of at least €2,000,000 if permitted to do so under the securities laws of Hong (as shown on its last annual unconsolidated or Kong) other than any such advertisement, invitation or consolidated financial statements); document relating to securities that are or are intended
WESTFIELD CORPORATION PROPOSAL // PAGE 101 SECTION 8 ADDITIONAL INFORMATION
to be disposed of only to persons outside Hong Kong or (i) Malaysia only to “professional investors” as defined in the Securities No approval from, or recognition by, the Securities and Futures Ordinance and any rules made thereunder. Commission of Malaysia has been or will be obtained Copies of this Demerger Booklet may be issued to a limited in relation to any offer of the OneMarket Shares. The number of persons in Hong Kong in a manner which does OneMarket Shares may not be issued or transferred in not constitute any issue, circulation or distribution of this Malaysia except to persons who are Westfield Shareholders Demerger Booklet, or any offer or an invitation in respect in compliance with the Demerger. of these securities, to the public in Hong Kong. The (j) The Netherlands document is for the exclusive use of Westfield Shareholders in connection with the Demerger, and no steps have been This Demerger Booklet has not been approved by, or taken to register or seek authorisation for the issue of this filed with the Dutch authority for the financial markets, Demerger Booklet in Hong Kong. (stichting autoriteit financiële markten, AFM), accordingly this document does not constitute a prospectus within This Demerger Booklet is confidential to the person to the meaning of Directive 2003/71/EC (as amended) (the whom it is addressed and no person to whom a copy of this “Prospectus Directive”) as implemented in the Dutch Demerger Booklet is issued may issue, circulate, distribute, Financial Supervision Act (Wet op het financieel toezicht, publish, reproduce or disclose (in whole or in part) this DFSA). The OneMarket Shares may not be offered or sold in Demerger Booklet to any other person in Hong Kong or use the Netherlands other than pursuant to an exemption from for any purpose in Hong Kong other than in connection with the obligation to publish a prospectus. the consideration of the Demerger by the person to whom this Demerger Booklet is addressed. Consequently, the OneMarket Shares will not be offered or sold in the Netherlands other than to less than 150 persons (g) Ireland in the Netherlands and/or to qualified investors only, in This Demerger Booklet does not constitute a prospectus compliance with the relevant exemptions from the obligation under any Irish laws or regulations and has not been filed to publish a prospectus pursuant to the DFSA. with, or approved by, any Irish regulatory authority as this (k) Norway document has not been prepared in the context of a public offering of securities in Ireland within the meaning of the Irish This Demerger Booklet has not been approved by, or Prospectus (Directive 2003/71/EC) Regulations 2005, as registered with, any Norwegian securities regulator under amended (the Prospectus Regulations). the Norwegian Securities Trading Act of 29 June 2007. Accordingly, this Demerger Booklet shall not be deemed The OneMarket Shares have not been offered or sold, and to constitute an offer to the public in Norway within the will not be offered, sold or delivered directly or indirectly in meaning of the Norwegian Securities Trading Act of 2007. Ireland by way of a public offering, except to (i) “qualified investors” as defined in Regulation 2(l) of the Prospectus The OneMarket Shares may not be offered or sold, directly Regulations and (ii) fewer than 150 natural or legal persons or indirectly, in Norway except: who are not qualified investors. —— to “professional clients” (as defined in Norwegian Securities Regulation of 29 June 2007 no. 876 and (h) Japan including non-professional clients having met the The OneMarket Shares have not been and will not be criteria for being deemed to be professional and for registered under Article 4, paragraph 1 of the Financial which an investment firm has waived the protection Instruments and Exchange Law of Japan (Law No. 25 of as non-professional in accordance with the procedures 1948), as amended (the FIEL) pursuant to an exemption in this regulation); from the registration requirements applicable to a private —— to fewer than 150 natural or legal persons (other than placement of securities to small number investors. This “professional clients”); or Demerger Booklet is for the exclusive use of existing Westfield Shareholders in connection with the Demerger. —— in any other circumstances provided that no such offer This document is confidential to the person to whom it of OneMarket Shares shall result in a requirement for is addressed and must not be distributed, published, the registration, or the publication of a prospectus reproduced or disclosed (in whole or in part) to any pursuant to the Norwegian Securities Trading Act of other person in Japan or resident of Japan other than in 29 June 2007. connection with consideration by Westfield Shareholders of the Demerger.
PAGE 102 // WESTFIELD CORPORATION PROPOSAL (l) Papua New Guinea (n) South Africa This Demerger Booklet is being distributed only to The Demerger does not constitute an offer of securities to Westfield Shareholders. This Demerger Booklet has not the public in terms of the South African Companies Act and been registered as a prospectus in Papua New Guinea accordingly, this document does not, nor is it intended to, and no notice of the proposed offer will be submitted to constitute a prospectus prepared and registered under the the Registrar of Companies. No other documents are Companies Act. being lodged with the Registrar of Companies or the PNG Securities Commission in respect of the Demerger. The (o) South Korea Demerger is not, and should not be construed as, an offer Neither Westfield Corporation nor OneMarket Limited is of securities to the public in Papua New Guinea. making any representation with respect to the eligibility of any recipients of this document to acquire the OneMarket (m) Singapore Shares under the laws of the Republic of Korea, including This Demerger Booklet and any other document or material the Foreign Exchange Transaction Act and regulations in connection with the offer, sale or distribution, or invitation thereunder. The OneMarket Shares have not been, and will for subscription, purchase or receipt of OneMarket Shares not be, registered under the Financial Investment Services have not been and will not be registered as a prospectus and Capital Markets Act of Korea (FSCMA) and therefore with the Monetary Authority of Singapore and this offering is may not be offered or sold (directly or indirectly) in Korea not regulated by any financial supervisory authority pursuant or to any resident of Korea or to any persons for re-offering to any legislation in Singapore. Accordingly, statutory or resale in Korea or to any resident of Korea (as defined liabilities in connection with the contents of prospectuses under the Foreign Exchange Transaction Act of Korea and under the Securities and Futures Act, Cap. 289 (the SFA) its enforcement decree), except as permitted under the will not apply. applicable laws and regulations of Korea. This Demerger Booklet and any other document or material Accordingly, the OneMarket Shares may not be offered in connection with the offer, sale or distribution, or invitation or sold in Korea other than (i) to “accredited investors” for subscription, purchase or receipt of OneMarket Shares (as defined in the FSCMA) or (ii) in other circumstances that may not be offered, sold or distributed, or be made the do not constitute an offer to the public within the meaning subject of an invitation for subscription, purchase or receipt, of the FSCMA. whether directly or indirectly, to persons in Singapore except pursuant to exemptions in Subdivision (4) Division 1, Part XIII (p) Sweden of the SFA, including the exemption under section 273(1)(c) This Demerger Booklet has not been, and will not be, of the SFA, or otherwise pursuant to, and in accordance with registered with or approved by the Swedish Financial the conditions of, any other applicable provisions of the SFA. Supervisory Authority. Accordingly, this Demerger Booklet may not be made available, nor may the OneMarket Any offer is not made to you with a view to OneMarket Shares be offered for sale in Sweden, other than under Shares being subsequently offered for sale to any other circumstances that are deemed not to require a prospectus party. You are advised to acquaint yourself with the SFA under the Swedish Financial Instruments Trading Act provisions relating to on-sale restrictions in Singapore and (1991:980) (Sw. lag (1991:980) om handel med finansiella comply accordingly. instrument). The investments contained or referred to in this document Persons in Sweden may participate in the Demerger only may not be suitable for you and it is recommended that if they (i) are “qualified investors” (as defined in the Financial you consult an independent investment advisor if you are Instruments Trading Act) or (ii) non-qualified investors in doubt about such investment. Nothing in this document who are existing Westfield Shareholders and who, in the constitutes investment, legal, accounting or tax advice or a aggregate, number less than 150 persons and are acting representation that any investment or strategy is suitable or for their own account. Only such investors may receive appropriate to your individual circumstances or otherwise this Demerger Booklet and they may not distribute it or constitutes a personal recommendation to you. the information contained in it to any other person. Neither OneMarket Limited nor Westfield Corporation is in the business of dealing in securities or hold itself (q) Switzerland out or purport to hold itself out to be doing so. As such, The OneMarket Shares may not be publicly offered in OneMarket Limited and Westfield Corporation are neither Switzerland and will not be listed on the SIX Swiss Exchange licensed nor exempted from dealing in securities or carrying (SIX) or on any other stock exchange or regulated trading out any other regulated activities under the SFA or any other facility in Switzerland. This Demerger Booklet has been applicable legislation in Singapore. prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this Demerger Booklet nor any other offering or marketing material relating to the
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OneMarket Shares may be publicly distributed or otherwise 8.15 Regulatory relief and waivers made publicly available in Switzerland. (a) ASIC relief Neither this Demerger Booklet nor any other offering or marketing material relating to the OneMarket Shares (i) ASIC relief as to secondary sales of OneMarket have been or will be filed with or approved by any Swiss Limited regulatory authority. In particular, this Demerger Booklet ASIC has granted an exemption from the resale provisions will not be filed with, and the offer of Shares will not be in sections 707(3) to 707(6) of the Corporations Act to permit supervised by, the Swiss Financial Market Supervisory OneMarket Shares to be freely on-sold in the 12 months Authority. following their transfer under the Demerger (irrespective This Demerger Booklet is personal to the recipient only of whether those OneMarket Shares were transferred to and not for general circulation in Switzerland. Demerger Participants or to the Sale Agent). Specifically, the exemption applies where: (r) United Kingdom —— after the Demerger, a holder makes an offer of Neither this Demerger Booklet nor any other document OneMarket Shares for sale; relating to the Demerger has been delivered for approval —— within the previous 12 months of the offer, the to the Financial Conduct Authority in the United Kingdom OneMarket Shares were transferred to a holder and no prospectus (within the meaning of section 85 of of Westfield Shares or to the Sale Agent under the the Financial Services and Markets Act 2000, as amended Demerger; (FSMA)) has been published or is intended to be published in respect of the Shares. —— the offer is not made within 12 months of a sale or transfer of the OneMarket Shares by a person (other Any invitation or inducement to engage in investment than Westfield Corporation) who: activity (within the meaning of section 21 FSMA) received in connection with the transfer of the OneMarket Shares has —— controls OneMarket Limited; only been communicated, and will only be communicated, —— would have been required by subsection 707(2) in the United Kingdom in circumstances in which section of the Corporations Act to give disclosure to 21(1) FSMA does not apply to Westfield Corporation or investors under Part 6D.2 but for section 708 OneMarket Limited. In the United Kingdom, this Demerger of the Corporations Act; and Booklet is being distributed only to, and is directed at, —— did not give disclosure to investors under persons to whom it may lawfully be distributed or directed Part 6D.2 because of section 708 of the within the circumstances described in Article 43 of the Corporations Act. Financial Services and Markets Act 2000 (Financial (ii) ASIC relief as to Sale Facility Promotion) Order 2005 and/or any other persons to whom it may lawfully be communicated (all such persons being ASIC has provided an in principle decision indicating that referred to as Relevant Persons). it will grant an exemption from certain requirements that Westfield Corporation may otherwise be required to comply The investment to which this Demerger Booklet relates is with in order to operate the Sale Facility, including: available only to, and any invitation, offer or agreement to purchase will be engaged in only with, Relevant Persons. —— Section 601ED of the Corporations Act in relation to Any person who is not a Relevant Person should not act the Sale Facility; and or rely on this Demerger Booklet or any of its contents. —— Divisions 2 to 5 of Part 7.9 of the Corporations Act in relation to an interest in the Sale Facility. 8.14 Important notice to New Zealand investors ASIC has also confirmed that Westfield Corporation does This Demerger Booklet is not a New Zealand disclosure not need to comply with Division 5A of Part 7.9 of the document and has not been registered, filed with or Corporations Act to the extent that Westfield Corporation approved by any New Zealand regulatory authority under invites an Ineligible Foreign Holder and/or a Selling Small or in accordance with the Financial Markets Conduct Act Shareholder to make an offer to sell their OneMarket Shares 2013 (or any other relevant New Zealand law). The offer of through the Sale Facility. OneMarket Shares under the Demerger is being made to existing shareholders of Westfield Corporation in reliance upon the Financial Markets Conduct (Incidental Offers) Exemption Notice 2016 and, accordingly, this Demerger Booklet may not contain all the information that a disclosure document is required to contain under New Zealand law.
PAGE 104 // WESTFIELD CORPORATION PROPOSAL (iii) Other ASIC relief —— confirm in relation to ASX Listing Rule 1.3.1 that Regulation 8302(d) of Part 3 of Schedule 8 to the OneMarket Limited will satisfy the assets test; Corporations Regulations requires this Demerger Booklet —— confirm that ASX Listing Rule 10.1 does not apply to disclose particulars of any payment or benefit that is to the transfer of OneMarket Shares under the proposed to be made or given to any director, secretary or Demerger to any of Westfield Corporation’s substantial executive officer of Westfield Corporation or a related body holders or directors; and corporate of Westfield Corporation (Relevant Person) as —— confirm that the ASX does not consider that the compensation for the loss of office, or as consideration for or Demerger requires additional shareholder approval in connection with his or her retirement from office. ASIC has for the purposes of ASX Listing Rule 11.4. granted Westfield Corporation relief from this requirement such that this Demerger Booklet is not required to: 8.16 Capital raising —— disclose particulars of payments or benefits which may OneMarket Limited has not raised any capital for the be made to a Relevant Person in relation to their loss 3 months before the date of issue of the Demerger Booklet of office or retirement from office, unless: (except in connection with the internal restructure referred —— the Relevant Person will lose office or retire from to in section 3.2) and will not need to raise any capital for office as a consequence of, or in connection with, 3 months after the date of issue of the Demerger Booklet. the Demerger; or 8.17 Material changes in Westfield Corporation’s —— the amount of any payment or benefit which may financial performance and financial position be made to the Relevant Person upon their loss To the knowledge of the Westfield Directors the financial of or retirement from office may be materially position of Westfield Corporation has not materially changed affected by the Demerger Scheme; or since the full year reporting date of 31 December 2017. —— the Relevant Person is not a Westfield Director and such payments are not disclosed on an 8.18 Other information material to the making of aggregate basis; and a decision in relation to the Demerger —— state the identity of any Relevant Person who Except as set out in this Demerger Booklet, so far as your will lose office or retire from office in connection Westfield Directors are aware, there is no other information with the Demerger, unless that person is a material to the making of a decision in relation to the Westfield Director. Demerger, being information that is within the knowledge of any Westfield Director or any director of a Related Body (b) ASX waivers Corporate of Westfield which has not previously been ASX has indicated that it will provide “in principle” waivers disclosed to Westfield Shareholders. of certain ASX Listing Rules and certain “in- principle” 8.19 Supplementary information confirmations in connection with the Demerger. In particular, ASX has indicated it will: Westfield will issue a supplementary document to this Demerger Booklet if it becomes aware, between the date of —— confirm that OneMarket Limited’s structure and lodgement of this Demerger Booklet for registration by ASIC operations are appropriate for a listed entity for the and the Effective Date: purposes of ASX Listing Rule 1.1, condition 1 provided that, as a condition of admission, OneMarket Limited (a) that a material statement in this Demerger Booklet is consult ASX on any proposed change to the ownership false or misleading in a material respect; structure of OM Delaware; (b) that there is a material omission from this Demerger —— confirm to Westfield that for the purposes of ASX Booklet; Listing Rule 1.1, condition 3, OneMarket Limited may (c) that a significant change affecting a matter included issue an information memorandum that complies with in this Demerger Booklet has occurred; or the requirements of ASX Listing Rule 1.4 on condition (d) of a significant new matter that has arisen which would that the information memorandum incorporates parts have been required to be included in this Demerger of the Demerger Booklet, rather than a prospectus for Booklet if it had arisen before the date of lodgement the purposes of its admission to ASX; of this Demerger Booklet for registration by ASIC. —— confirm that none of the OneMarket Shares to be The form which the supplementary document may take will transferred under the Demerger will be restricted depend on the nature and timing of the new or changed securities for the purposes of ASX Listing Rule 1.1, circumstances. condition 10 and ASX Listing Rule 9.1 (other than the OneMarket Shares to be transferred to related parties or promoters of OneMarket Limited or Westfield Corporation);
WESTFIELD CORPORATION PROPOSAL // PAGE 105 SECTION 9 GLOSSARY
This section contains the meanings of terms used in this Demerger Booklet The following is a glossary of certain terms used in this Demerger Booklet. Term Meaning 12 Digit 12 Digit Marketing, Inc., an entity incorporated under the laws of the state of Delaware with registration number 5706274. 12 Digit Acquisition Agreement the Agreement and Plan of Merger entered into on 13 February 2017 relating to the acquisition of 12 Digit by OneMarket. 2018 Equity Incentive Plan the employee incentive plan described in section 4.12(d) of this Demerger Booklet. AAS Australian Accounting Standards. API application program interface, a set of tools used in the building of software applications. ASIC the Australian Securities and Investments Commission. ASX ASX Limited (ABN 98 008 624 691) or the market operated by it, as the context requires. ASX Listing admission of OneMarket Limited to the Official List and for Official Quotation of the OneMarket Shares on ASX. ASX Listing Rules the listing rules of ASX and any other applicable rules of ASX modified to the extent of any express written waiver by ASX. AUD, A$ or Australian dollar Australian dollars. Business Day a business day as defined in the ASX Listing Rules and on which trading will take place on Euronext Paris and Euronext Amsterdam and the New York Stock Exchange. Capital Reduction means the reduction in the capital of Westfield Corporation by the Capital Reduction Aggregate Amount to be applied equally against each Westfield Share on issue as at the Demerger Record Date in accordance with the terms of the Capital Reduction Resolution Capital Reduction Aggregate Amount means the amount of the OneMarket Market Value less the Demerger Dividend Aggregate Amount. Capital Reduction Entitlement in relation to a Demerger Participant, so much of the amount allocated to the Demerger Participant under the Capital Reduction Resolution as is attributable to the Westfield Shares held by that Demerger Participant. Capital Reduction Resolution the resolution to approve the Capital Reduction to be put to Westfield Shareholders at the General Meeting. CHESS the Clearing House Electronic Sub register System, operated in accordance with the Corporations Act. Conditions Precedent the conditions precedent set out in the Demerger Scheme of Arrangement in Annexure E.
PAGE 106 // WESTFIELD CORPORATION PROPOSAL Term Meaning Control has the meaning given in section 50AA of the Corporations Act. Corporations Act the Corporations Act 2001 (Cth) (Australia). Corporations Regulations the Corporations Regulations 2001 (Cth) (Australia). Demerger the demerger of OneMarket from Westfield to be implemented by the Demerger Scheme on the terms of the Demerger Transaction Documents. Demerger Booklet this booklet. Demerger Consideration one OneMarket Share for every 20 Westfield Shares held by a Westfield Shareholder as at the Demerger Record Date. Demerger Deed the demerger deed between OneMarket Limited and Westfield Corporation dated 6 April 2018 described in section 3.9(b). Demerger Deed Poll the deed poll dated 6 April 2018 executed by OneMarket Limited and attached as Annexure F under which OneMarket covenants to carry out its obligations under the Demerger. Demerger Dividend the special dividend for an amount, per Westfield Share, which is equal to the Demerger Dividend Aggregate Amount divided by the number of Westfield Shares on issue on the Demerger Record Date (rounded to the nearest Australian cent). Demerger Dividend Aggregate Amount the amount that is the lower of: (a) A$150,000,000; and (b) the OneMarket Market Value. Demerger Dividend Entitlement in relation to each Demerger Participant, means the Demerger Dividend Aggregate Amount, divided by the number of Westfield Shares on issue on the Demerger Record Date, then multiplied by the number of Westfield Shares held by the Demerger Participant on the Demerger Record Date (rounded to the nearest Australian cent). Demerger Dividend Resolution a resolution of the Westfield Board to approve the determination and payment of the Demerger Dividend. Demerger Implementation Date the date scheduled for implementation of the Demerger, currently expected to be 7 June 2018, or such other date as Unibail-Rodamco and Westfield agree in writing. Demerger Implementation Deed the demerger implementation deed between OneMarket Limited and Westfield dated 6 April 2018 described in section 3.9(a). Demerger Participant each person registered in the Westfield Register as the holder of a Westfield Share as at the Demerger Record Date. Demerger Principle the underlying principle of the Demerger as described in the Demerger Deed and section 3.8(a). Demerger Record Date 7.00pm on the 2nd Business Day following the Effective Date (or such other date as required or approved by ASX) or such other date as Westfield and Unibail-Rodamco may agree in writing. Demerger Sale Facility Election a valid election not to receive OneMarket Shares and to participate in the Sale Facility made by a Small Shareholder. Demerger Sale Facility Election Form the form to be completed by Small Shareholders who wish to participate in the Sale Facility and not receive OneMarket Shares. Demerger Scheme the scheme of arrangement between Westfield Corporation and Demerger Participants as set out in Annexure E. Demerger Scheme Meeting the meeting to be convened by the Scheme Court pursuant to the Demerger Scheme. Demerger Scheme Meeting Proxy Form the red proxy form for the Demerger Scheme Meeting which accompanies this Demerger Booklet. Demerger Scheme Meeting Resolution the resolution to approve the Demerger Scheme at the Demerger Scheme Meeting.
WESTFIELD CORPORATION PROPOSAL // PAGE 107 SECTION 9 GLOSSARY
Term Meaning Demerger Transaction Document the Demerger Scheme, the Demerger Deed Poll, the Demerger Deed and the Demerger Implementation Agreement. Distribution the Demerger Dividend and the Capital Reduction (if any). Distribution Entitlement in relation to a Demerger Participant, the aggregate of that Demerger Participant’s Demerger Dividend Entitlement and Capital Reduction Entitlement. Effective the coming into effect, pursuant to section 411(10) of the Corporations Act, of the order of the Scheme Court made under sections 411(4)(b) and 411(6) in relation to the Demerger Scheme. Effective Date the date on which the Demerger Scheme become Effective. Election Withdrawal Form the form to be completed by a person who wishes to withdraw a Demerger Sale Facility Election. Eligible Westfield Shareholder any Westfield Shareholder recorded on the Westfield Register on the Demerger Record Date who is not an Ineligible Foreign Holder. Employee Rights any rights to Westfield Securities issued under employee incentive arrangements by the Westfield Group. FluidM FluidM, Inc., an entity incorporated under the laws of the state of Delaware with registration number 5804911. FTC the Federal Trade Commission of the United States. FTC Act the Federal Trade Commission Act of 1914 (US). FY financial year. GDPR General Data Protection Regulation 2016/679 of the European Parliament. General Meeting the meeting of Westfield Shareholders to be convened to vote on the Capital Reduction Resolution. General Meeting Proxy Form the blue proxy form for the General Meeting which accompanies this Demerger Booklet. Government Agency any governmental, semi-governmental, administrative, fiscal, judicial or quasi- judicial body, department, commission, authority, tribunal, agency or entity. IASB the International Accounting Standards Board. IFRS International Financial Reporting Standards. Independent Expert Grant Samuel & Associates Pty Limited (ABN 28 050 036 372) (AFSL 240985). Independent Expert’s Report the report of the Independent Expert, as set out in Annexure A. Independent Limited Assurance Report the report of the Investigating Accountant, as set out in Annexure B. Ineligible Foreign Holder a Westfield Shareholder whose address shown in the Westfield Register on the Demerger Record Date is a place outside Australia and its external territories and New Zealand, unless Westfield determines that it is lawful and not unduly onerous or impracticable to issue or provide that Westfield Shareholder with OneMarket Shares under the Demerger Scheme. Investigating Accountant Ernst & Young Transaction Advisory Services Limited. Investors’ Rights Agreement the document entitled “Investors’ Rights Agreement” between OM Delaware, OneMarket Limited and WCL Holdings, Inc dated 6 April 2018. Meetings the Demerger Scheme Meeting and the General Meeting. Newco BI a public company with limited liability (naamloze vennootschap) incorporated or to be incorporated in the Netherlands. New Unibail-Rodamco Unibail-Rodamco and Newco BI (a stapled group). New Unibail-Rodamco Stapled Securities the stapled Unibail-Rodamco Shares and Newco BI shares to be issued pursuant to the Unibail-Rodamco Schemes.
PAGE 108 // WESTFIELD CORPORATION PROPOSAL Term Meaning Notice of Demerger Scheme Meeting the notice in relation to the Demerger Scheme Meeting set out in Annexure C to this Demerger Booklet. Notice of General Meeting the notice in relation to the General Meeting set out in Annexure D to this Demerger Booklet. NPA a network participation agreement between OneMarket and a shopping venue or retailer. Official List the Official List of the ASX. Official Quotation quotation of OneMarket Shares on the Official List. OneMarket that part of Westfield’s retail technology business utilised by the OneMarket Group to develop its retail technology network and product solutions. OneMarket Board the board of directors of OneMarket Limited. OneMarket Constitution the constitution of OneMarket Limited which is summarised in section 8.5. OneMarket Directors the directors of OneMarket Limited. OneMarket Group OneMarket Limited and its Subsidiaries. OneMarket Limited OneMarket Limited (ABN 28 623 247 549). OneMarket Market Value the number of OneMarket Shares on issue immediately following the Demerger multiplied by the OneMarket VWAP. OneMarket Register the register of shareholders maintained by OneMarket Limited in accordance with the Corporations Act. OneMarket Registry Computershare Investor Services Pty Limited (ABN 48 078 279 277). OneMarket Share a fully paid ordinary share in OneMarket Limited. OneMarket Shareholder each person who is registered in the OneMarket Register from time to time as the holder of a OneMarket Share. OneMarket VWAP the VWAP of OneMarket Shares for the first ten Business Days starting from the date of the commencement of trading of OneMarket Shares on ASX (including on a deferred settlement basis). OM Delaware OneMarket Holdings, Inc., a Delaware corporation. Regulatory Authority includes a Government Agency, any regulatory organisation established under statute and ASX. Related Body Corporate has the meaning given to it in the Corporations Act. Relevant Interest has the meaning given to it in sections 608 and 609 of the Corporations Act. Requisite Majority means: (a) in relation to the Demerger Scheme Resolution to be put to the Demerger Scheme Meeting, the resolution being passed by a majority in number (more than 50%) of Westfield Shareholders, who are present and voting, either in person or by proxy, attorney or in the case of a corporation its duly appointed corporate representative and passed by at least 75% of the votes cast on the resolution by Westfield Shareholders, who are present and voting, either in person or by proxy, attorney or in the case of a corporation its duly appointed corporate representative; and (b) in relation to the Capital Reduction Resolution to be put to the General Meeting a resolution being passed by at least 50% of the votes cast on the resolution by Westfield Shareholders, who are present and voting, either in person or by proxy, attorney or in the case of a corporation its duly appointed corporate representative. Resolutions the Demerger Scheme Resolution and the Capital Reduction Resolution. Restructure has the meaning given in section 3.2. Rothschild NM Rothschild & Sons Limited, and Rothschild Australia Limited. Sale Agent UBS AG, Australia Branch (ABN 47 088 129 613).
WESTFIELD CORPORATION PROPOSAL // PAGE 109 SECTION 9 GLOSSARY
Term Meaning Sale Facility the facility under which Selling Shareholders’ OneMarket Shares may be sold, as described in section 3.6. Sale Facility Proceeds the proceeds from the sale of a Selling Shareholder’s OneMarket Shares under the Sale Facility, calculated on an averaged basis so that all Selling Shareholders receive the same price for each OneMarket Share sold on their behalf. Scheme Court the Supreme Court of New South Wales. Second Court Date the day on which the Scheme Court: (a) makes an order pursuant to section 411(4)(b) of the Corporations Act approving the Demerger Scheme; or (b) declines to approve the Demerger Scheme. Second Court Hearing the hearing of the application made to the Scheme Court for an order pursuant to sections 411(4)(b) and 411(6) of the Corporations Act approving the Demerger Scheme. Selling Shareholder a Selling Small Shareholder or an Ineligible Foreign Holder. Selling Small Shareholder a Small Shareholder who has made a valid Demerger Sale Facility Election. Small Shareholder an Eligible Westfield Shareholder who individually holds 10,000 or fewer Westfield Shares as at the Demerger Record Date. Stockholder’s Agreement the document entitled “Stockholder’s Agreement” between OM Delaware, OneMarket Limited and WCL Holdings, Inc dated 6 April 2018. Subsidiary has the meaning given in the Corporations Act, provided that an entity will also be taken to be a Subsidiary of another entity if it is Controlled by that entity and, without limitation: (a) a trust may be a Subsidiary, for the purposes of which a unit or other beneficial interest will be regarded as a share; (b) an entity may be a Subsidiary of a trust if it would have been a Subsidiary if that trust were a corporation; and (c) an entity will also be deemed to be a Subsidiary of an entity if that entity is required by the accounting standards to be consolidated with that entity. Transaction the Unibail-Rodamco Transaction and the Demerger. Unibail-Rodamco Unibail-Rodamco SE. Unibail-Rodamco Schemes the scheme of arrangement under Part 5.1 of the Corporations Act involving Westfield Corporation and the amendment to the constitutions of Westfield America Trust and WFD Trust to give effect to the Unibail-Rodamco Transaction. Unibail-Rodamco Scheme Consideration the New Unibail-Rodamco Stapled Securities and cash to be issued and paid to Westfield Stapled Securityholders pursuant to the Unibail-Rodamco Schemes. Unibail-Rodamco Transaction the combination of Unibail-Rodamco and Westfield whereby Westfield is acquired by New Unibail-Rodamco pursuant to the Unibail-Rodamco Schemes. Unibail-Rodamco Transaction Meetings (a) the meeting to be convened by the Scheme Court at which Westfield Shareholders will vote on the WCL Scheme (as that term is defined in the Unibail-Rodamco Transaction Securityholder Booklet) pursuant to section 411(1) of the Corporations Act, and includes any adjournment of such meeting; and (b) the Westfield General Meetings (as that term is defined in the Unibail- Rodamco Transaction Securityholder Booklet). Unibail-Rodamco Transaction the booklet to be approved by the Scheme Court for distribution to Westfield Securityholder Booklet Stapled Securityholders in relation to the Unibail-Rodamco Transaction, including related notices of meetings and proxy forms.
PAGE 110 // WESTFIELD CORPORATION PROPOSAL Term Meaning US the United States of America. USD, US$ or $ United States dollars. US Securities Act the US Securities Act of 1933, as amended. Voting Agreement the document entitled “Voting Agreement” between OM Delaware, WCL Holdings, Inc and OneMarket dated 6 April 2018. VWAP the volume weighted average price of the relevant shares traded on ASX during the relevant period but does not include any trades which WCL determines to be outside the ordinary course of trading, which may include any “Crossing” transacted outside the “Open Session State” or any “Special Crossing” transacted at any time, each as defined in the ASX Operating Rules, or any overseas trades or trades pursuant to the exercise of options over such shares. WAML Westfield America Management Limited (ABN 66 072 780 619). Westfield America Trust Westfield America Trust (ARSN 092 058 449). WCL Holdings, Inc WCL Holdings, Inc a wholly owned Subsidiary of Westfield Corporation. Westfield each of Westfield Corporation, Westfield America Trust and WFD Trust (and where applicable includes WAML in its capacity as responsible entity of Westfield America Trust or WFD Trust, as applicable), or all of them as the context requires. Westfield Board the board of directors of Westfield Corporation. Westfield Corporation Westfield Corporation Limited (ABN 12 166 995 197). Westfield Directors the directors of Westfield Corporation. Westfield Group Westfield and its Subsidiaries. Westfield Register the register of shareholders maintained by Westfield in accordance with the Corporations Act. Westfield Share a fully paid ordinary share in the capital of Westfield Corporation. Westfield Shareholder each person who is registered in the Westfield Register from time to time as the holder of a Westfield Share. Westfield’s Share Registry Computershare Investor Services Pty Limited (ABN 48 078 279 277). Westfield Stapled Securities means a Westfield Share, a Westfield America Trust unit and a WFD Trust unit stapled to each other in accordance with the provisions of the stapling deed dated 30 June 2014 and the constitutions of Westfield Corporation, Westfield American Trust and WFD Trust. Westfield Stapled Securityholder each person registered in the Westfield Register as the holder of Westfield Stapled Securities. WFD Trust means WFD Trust (ARSN 168 765 875).
Interpretation In this Demerger Booklet (other than the Annexures): (a) except as otherwise provided, all words and phrases used in this Demerger Booklet have the meanings (if any) given to them by the Corporations Act; (b) headings are for ease of reference only and will not affect the interpretation of this Demerger Booklet; (c) words importing the singular, where the context requires, include the plural and vice versa and words importing any gender include all genders. A reference to a person includes a reference to a corporation; (d) all dates and times are Sydney, Australia times; and (e) a reference to a section or Annexure is to a section in, or Annexure to, this Demerger Booklet, unless otherwise stated.
WESTFIELD CORPORATION PROPOSAL // PAGE 111 ANNEXURE A INDEPENDENT EXPERT’S REPORT
PAGE 112 // WESTFIELD CORPORATION PROPOSAL
FINANCIAL SERVICES GUIDE AND INDEPENDENT EXPERT’S REPORT IN RELATION TO THE PROPOSED DEMERGER OF ONEMARKET LIMITED
GRANT SAMUEL & ASSOCIATES PTY LIMITED ABN 28 050 036 372
12 APRIL 2018
WESTFIELD CORPORATION PROPOSAL // PAGE 113 ANNEXURE A INDEPENDENT EXPERT’S REPORT
FINANCIAL SERVICES GUIDE
Grant Samuel & Associates Pty Limited (“Grant Samuel”) holds Australian Financial Services Licence No. 240985 authorising it to provide financial product advice on securities and interests in managed investments schemes to wholesale and retail clients. The Corporations Act, 2001 requires Grant Samuel to provide this Financial Services Guide (“FSG”) in connection with its provision of an independent expert’s report (“Report”) which is included in a document (“Disclosure Document”) provided to members by the company or other entity (“Entity”) for which Grant Samuel prepares the Report. Grant Samuel does not accept instructions from retail clients. Grant Samuel provides no financial services directly to retail clients and receives no remuneration from retail clients for financial services. Grant Samuel does not provide any personal retail financial product advice to retail investors nor does it provide market-related advice to retail investors. When providing Reports, Grant Samuel’s client is the Entity to which it provides the Report. Grant Samuel receives its remuneration from the Entity. In respect of the Reports for Westfield in relation to the demerger of OneMarket Limited (the “Demerger Report”) and the offer from Unibail-Rodamco SE (the “Transaction Report”) (together, “the Westfield Reports”), Grant Samuel will receive a fixed fee of US$1.8 million plus reimbursement of out-of-pocket expenses for the preparation of the Westfield Reports (as stated in Section 6.3 of the Demerger Report). No related body corporate of Grant Samuel, or any of the directors or employees of Grant Samuel or of any of those related bodies or any associate receives any remuneration or other benefit attributable to the preparation and provision of the Westfield Reports. Grant Samuel is required to be independent of the Entity in order to provide a Report. The guidelines for independence in the preparation of Reports are set out in Regulatory Guide 112 issued by the Australian Securities & Investments Commission on 30 March 2011. The following information in relation to the independence of Grant Samuel is stated in Section 6.3 of the Demerger Report: “Grant Samuel and its related entities do not have at the date of this report, and have not had within the previous two years, any business or professional relationship with Westfield or any financial or other interest that could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion in relation to the Demerger. Grant Samuel advises that it was retained to prepare the independent expert’s reports in relation to: . the merger of Westfield Group’s Australian and New Zealand businesses with Westfield Retail Trust to form Scentre Group in 2014; and . the merger of Westfield Holdings Limited, Westfield Trust and Westfield America Trust in 2004. Grant Samuel has also been appointed to prepare an independent expert’s report in relation to the Unibail- Rodamco Transaction. Grant Samuel had no part in the formulation of the Demerger. Its only role has been the preparation of this report. Grant Samuel will receive a fixed fee of US$1.8 million for the preparation of the reports on the Demerger and the Unibail-Rodamco Transaction. This fee is not contingent on the conclusions reached or the outcome of the Demerger or the Unibail-Rodamco Transaction. Grant Samuel’s out of pocket expenses in relation to the preparation of these reports will be reimbursed. Grant Samuel will receive no other benefit for the preparation of these reports. Grant Samuel considers itself to be independent in terms of Regulatory Guide 112 issued by the ASIC on 30 March 2011.” Grant Samuel has internal complaints-handling mechanisms and is a member of the Financial Ombudsman Service, No. 11929. If you have any concerns regarding the Demerger Report, please contact the Compliance Officer in writing at Level 19, Governor Macquarie Tower, 1 Farrer Place, Sydney NSW 2000. If you are not satisfied with how we respond, you may contact the Financial Ombudsman Service at GPO Box 3 Melbourne VIC 3001 or 1300 780 808. This service is provided free of charge. Grant Samuel holds professional indemnity insurance which satisfies the compensation requirements of the Corporations Act, 2001. Grant Samuel is only responsible for the Demerger Report and this FSG. Complaints or questions about the Disclosure Document should not be directed to Grant Samuel which is not responsible for that document. Grant Samuel will not respond in any way that might involve any provision of financial product advice to any retail investor.
GRANT SAMUEL & ASSOCIATES PTY LIMITED ABN 28 050 036 372 AFS Licence No 240985 Level 19 Governor Macquarie Tower, 1 Farrer Place Sydney NSW 2000 GPO BOX 4301 SYDNEY NSW 2001 T +61 2 9324 4211 F +61 2 9324 4301 GRANTSAMUEL.COM.AU
PAGE 114 // WESTFIELD CORPORATION PROPOSAL
TABLE OF CONTENTS
1 Details of the Demerger ______1
2 Scope of the Report ______4 2.1 Purpose of the Report ______4 2.2 Basis of Evaluation ______5 2.3 Sources of Information ______5 2.4 Limitations and Reliance on Information ______6
3 Impact of the Demerger on Westfield ______8 3.1 Structure and Ownership ______8 3.2 Financial Performance and Position ______10
4 Profile of OneMarket ______11 4.1 Strategy and Operations ______11 4.2 Financial Profile ______12 4.3 Directors and Management ______15 4.4 Risk Factors ______15
5 Evaluation of the Demerger ______16 5.1 Background to the Demerger ______16 5.2 Approach to Evaluation ______17 5.3 Opinion ______17 5.4 Analysis ______17 5.5 Other Considerations ______21 5.6 Tax Implications ______21 5.7 Capital Reduction ______22 5.8 Shareholder Decision ______23
6 Qualifications, Declarations and Consents ______24 6.1 Qualifications ______24 6.2 Disclaimers ______24 6.3 Independence ______24 6.4 Declarations ______25 6.5 Consents ______25 6.6 Other ______25
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1 Details of the Demerger On 12 December 2017, Westfield Corporation Limited (“Westfield Corporation”), Westfield America Trust and WFD Trust (collectively, “Westfield”) announced that they had entered into an implementation agreement under which it is proposed that Westfield be acquired by Unibail-Rodamco SE (“Unibail- Rodamco”), Europe’s largest shopping centre owner/operator (the “Unibail-Rodamco Transaction”). At the same time, Westfield announced a separate proposal to demerge Westfield Corporation’s OneMarket retail technology platform (the “Demerger”). The Demerger is a separate transaction to the Unibail-Rodamco Transaction. The Demerger is conditional on the Unibail-Rodamco Transaction proceeding. However, the Unibail-Rodamco Transaction is not conditional on the Demerger proceeding. To prepare for the Demerger, Westfield Corporation has undertaken an internal restructure. A number of steps have been taken to establish the relevant components of Westfield Corporation’s retail technology platform as a stand alone entity, in particular: . the incorporation of OneMarket Limited (“OneMarket”) as a new Australian public company. OneMarket is currently a wholly owned subsidiary of Westfield Corporation; . the incorporation of OneMarket Holdings, Inc. (“OM Delaware”), a new Delaware corporation, which is to be the main operating subsidiary. OM Delaware is currently an indirect wholly owned subsidiary of Westfield Corporation (90% through OneMarket and 10% through WCL Holdings Limited, both of which are wholly owned subsidiaries of Westfield Corporation); . the transfer of certain entities and assets to OM Delaware and its subsidiaries (“OneMarket Group”) which were previously held by subsidiaries of Westfield Corporation; . the transfer of certain assets to Westfield Corporation which were previously held by the OneMarket Group; . the transfer of certain Westfield Corporation employees so that their employer is a member of the OneMarket Group; and . a net contribution of cash, such that the net cash of the Westfield group attributable to the OneMarket Group as at 31 December 2017 was US$197.0 million. Following this internal restructure, OM Delaware owns all the business and operations of the OneMarket Group. If the Demerger is implemented, 100% of the shares in OneMarket will be demerged to Westfield Corporation shareholders on a pro rata basis. Westfield Corporation shareholders will hold 100% of the issued shares in OneMarket, which, in turn, will initially have a 90% interest in OM Delaware. The remaining 10% interest in OM Delaware will be retained by Westfield Corporation1. The Demerger is to be effected by way of a scheme of arrangement between Westfield Corporation and its shareholders (“Demerger Scheme”), a dividend “(Demerger Dividend”) and, if necessary, a reduction of Westfield Corporation’s share capital (“Capital Reduction”)2. If the Demerger Scheme takes effect, the Demerger will be implemented by payment of the Demerger Dividend and the Capital Reduction (if any). The Demerger Dividend and the proceeds from the Capital Reduction (if any) will not be paid in cash.
______1 These initial shareholdings will be diluted on a pro rata basis by the implementation of OneMarket equity incentive plan (see Section 4.12 of the Demerger Booklet for details). 2 The aggregate amount of the Demerger Dividend and the Capital Reduction will be an amount equal to the market value of all OneMarket shares calculated by reference to the volume weighted average price (“VWAP”) of OneMarket shares for the first 10 business days from the commencement of trading of OneMarket shares on the ASX. The Demerger Dividend will be the lower of A$150 million and the market value of all OneMarket shares (determined as set out above). If the market value of OneMarket shares (determined as set out above) exceeds A$150 million, the excess amount will be returned to Westfield Corporation shareholders through the Capital Reduction.
1
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Under the Demerger Scheme, Westfield Corporation will apply the Demerger Dividend and the Capital Reduction (if any) as consideration for the transfer of OneMarket shares to Westfield Corporation shareholders. Each Westfield Corporation shareholder will be entitled to receive one OneMarket share for every 20 Westfield Corporation shares that they hold. The Demerger will result in the issue and distribution of approximately 103.9 million OneMarket shares to Westfield Corporation shareholders. OneMarket has applied for admission to the official list and for official quotation of all OneMarket shares on the Australian Securities Exchange (“ASX”). The following Westfield Corporation shareholders will not receive OneMarket shares under the Demerger: . Westfield Corporation shareholders with registered addresses outside Australia and its external territories and New Zealand, unless Westfield has determined that it is lawful and not unduly onerous or impractical to transfer OneMarket shares to that Westfield Corporation shareholder under the Demerger3 (“ineligible foreign shareholders”); and . Westfield Corporation shareholders individually holding 10,000 or fewer Westfield Corporation shares (“small shareholders”) that elect to sell the OneMarket shares to which they would have been entitled, (together, “selling shareholders”). A sale facility has been established to sell on the ASX the OneMarket shares that would otherwise have been received by selling shareholders, with the proceeds remitted to selling shareholders free of any brokerage costs or stamp duty (but after excluding any interest and deducting any applicable withholding tax). Westfield has entered into: . a Network Participation Agreement with OneMarket (subject to certain conditions being satisfied); . a digital service agreement relating to the migration of certain products and services from OneMarket to Westfield; and . pilot agreements under which Westfield has agreed to participate in the pilot programs for certain of OneMarket’s products at certain Westfield retail properties and airports. OneMarket and OM Delaware have entered into an expense payment agreement under which OM Delaware has agreed to pay or reimburse OneMarket for all expenses reasonably incurred in relation to the conduct of OneMarket’s activities. As the Demerger is conditional on the Unibail-Rodamco Transaction proceeding, Unibail-Rodamco (through the acquisition of Westfield Corporation), will own 10% of OM Delaware. Unibail-Rodamco and OneMarket have entered into certain agreements that will govern the relationship between the shareholders of OM Delaware4. The key provisions of these agreements include: . until the earlier of Unibail-Rodamco no longer owning at least 5% of the common stock of OM Delaware and the closing of OM Delaware’s first firm commitment underwritten public offering of common stock, certain actions by OM Delaware (i.e. any adverse amendment to Unibail-Rodamco’s
______3 Based on information available to Westfield, Westfield Corporation shareholders with a registered address in the Bahamas, Canada, France, Malaysia, the Netherlands, Papua New Guinea, Singapore, South Africa, Switzerland, the United Kingdom or the United States, and Westfield Corporation shareholders meeting specified criteria and/or in specified circumstances in the People’s Republic of China, Germany, Hong Kong, Ireland, Japan, Norway, South Korea and Sweden will be entitled to have OneMarket shares transferred to them under the Demerger. 4 These agreements are OM Delaware’s Certificate of Incorporation, Bylaws, Investors’ Rights Agreement, Voting Agreement and Stockholders’ Agreement. See Section 8.7 of the Demerger Booklet for further details of these agreements.
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stockholder rights) and any transactions with OneMarket will require the approval of Unibail-Rodamco (other than for certain specified exemptions); . Unibail-Rodamco and OneMarket will be entitled to rights with respect to the registration of their OM Delaware shares under the US Securities Act of 1993 (subject to certain limitations), financial information of OM Delaware (for so long as they own at least 5%) and entitlements to take up their pro rata share of any new share issues and loan funds; . the OM Delaware board currently consists of three directors nominated by OneMarket. The board will be increased to four directors, one of which will be nominated by Unibail-Rodamco. This right falls away if Unibail-Rodamco ceases to own at least 5% of OM Delaware or if the Network Participation Agreement is materially breached or terminated. OneMarket has the right to increase the size of the board and, for so long as it owns a majority of the common stock of OM Delaware, designate additional members; . if Unibail-Rodamco wishes to sell any of its interest in OM Delaware to any third party, OneMarket has a pre-emptive right to purchase the shares; . if OneMarket agrees to sell all its interest in OM Delaware in a change of control transaction approved by the OneMarket board, Unibail-Rodamco will be required to vote in favour of the transaction and sell its shares on the same terms as OneMarket; . if OneMarket sells shares in OM Delaware to a third party that results in OneMarket owning less than 50% of OM Delaware, Unibail-Rodamco has the right to sell up to all its interest in OM Delaware to the third party at the same price and on the same terms; . if OM Delaware has not completed an initial public offer or change of control transaction within three years from implementation of the Demerger, Unibail-Rodamco has the right to require OneMarket to purchase its OM Delaware shares in exchange for shares (with an equivalent market value) in OneMarket; and . if the Network Participation Agreement between OM Delaware and Unibail-Rodamco is terminated prior to the date of the Demerger and no replacement agreement is entered into within 18 months of termination, OneMarket may purchase Unibail-Rodamco’s shares in OM Delaware. The Demerger is subject to a number of conditions that are set out in the Notice of Meeting and Explanatory Memorandum in relation to the Demerger (the “Demerger Booklet”). In summary, the key conditions include: . Westfield Corporation shareholder approval of the Demerger Scheme and the related Capital Reduction by the necessary majorities; . approval of the Unibail-Rodamco Transaction by the Supreme Court of New South Wales at the second court hearing. The Demerger is conditional on the Unibail-Rodamco Transaction being implemented. If the Unibail-Rodamco Transaction is not implemented, the Demerger will not proceed (and Westfield Corporation will retain 100% of OneMarket); . Supreme Court of New South Wales approval of the Demerger; and . the ASX approves the admission of OneMarket to the official list of the ASX and grants permission for official quotation of OneMarket shares. The directors of Westfield Corporation have unanimously recommended that Westfield Corporation shareholders vote in favour of the Demerger subject to the independent expert concluding (and continuing to conclude) that the Demerger is in the best interests of Westfield Corporation shareholders. Subject to those same qualifications, each Westfield Corporation director intends to vote all Westfield Corporation shares held or controlled by them in favour of the Demerger.
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2 Scope of the Report
2.1 Purpose of the Report The Demerger is subject to the approval of Westfield Corporation shareholders in accordance with: . Section 256B and 256C of the Corporations Act, 2001 (Cth) (“Corporations Act”) (“Sections 256B and 256C”); and . Section 411 of the Corporations Act (“Section 411”). Sections 256B and 256C govern reductions in capital. They require the prior approval of shareholders before a capital reduction can be effected. Under Section 256B and 256C, the capital reduction must be approved by a majority in number (i.e. more than 50%) of shareholders present and voting (either in person or by proxy) at the meeting. Sections 256B and 256C do not require an independent expert’s report. Section 411 governs schemes of arrangement. It requires the prior approval of shareholders before a scheme of arrangement can be effected. Under Section 411, the scheme of arrangement must be approved by a majority in number (i.e. more than 50%) of each class of shareholders present and voting (either in person or by proxy) at the meeting, representing at least 75% of the votes cast on the resolution. If approved, the scheme of arrangement will then be subject to approval by the Supreme Court of New South Wales. Part 3 of Schedule 8 to the Corporations Regulations prescribes the information to be sent to securityholders in relation to schemes of arrangement pursuant to Section 411. Part 3 of Schedule 8 requires an independent expert’s report in relation to a scheme of arrangement to be prepared when a party to a scheme of arrangement has a prescribed shareholding in the company subject to the scheme, or where any of its directors are also directors of the company subject to the scheme. In those circumstances, the independent expert’s report must state whether the scheme of arrangement is in the best interests of securityholders subject to the scheme and must state reasons for that opinion. Although there is no requirement in the present circumstances for an independent expert’s report pursuant to the Corporations Act or the ASX Listing Rules, the directors of Westfield Corporation have engaged Grant Samuel & Associates Pty Limited (“Grant Samuel”) to prepare an independent expert’s report setting out whether, in its opinion, the Demerger is in the best interests of Westfield Corporation shareholders, and to state reasons for those opinions. A copy of the report will accompany the Demerger Booklet to be sent to shareholders by Westfield Corporation. This report is general financial product advice only and has been prepared without taking into account the objectives, financial situation or needs of individual Westfield Corporation shareholders. Accordingly, before acting in relation to their investment, shareholders should consider the appropriateness of the advice having regard to their own objectives, financial situation or needs. Shareholders should read the Demerger Booklet issued by Westfield Corporation in relation to the Demerger. Voting for or against the Demerger is a matter for individual shareholders based on their views as to value and business strategy, their expectations about future economic and market conditions and their particular circumstances including risk profile, liquidity preference, investment strategy, portfolio structure and tax position. Shareholders who are in doubt as to the action they should take in relation to the Demerger should consult their own professional adviser. Similarly, it is a matter for individual Westfield Corporation shareholders as to whether to buy, hold or sell securities in Westfield (before or after the Demerger) or OneMarket. These are investment decisions upon which Grant Samuel does not offer an opinion and independent of a decision on whether to vote for or against the Demerger. Shareholders should consult their own professional adviser in this regard.
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2.2 Basis of Evaluation Schemes of arrangement pursuant to Section 411 can encompass a wide range of transactions. Accordingly, “in the best interests” must be capable of a broad interpretation to meet the particular circumstances of each transaction. However, there is no legal definition of the expression “in the best interests”. The Australian Securities & Investments Commission (“ASIC”) has issued Regulatory Guide 111 (“RG111”) which establishes guidelines in respect of independent expert’s reports. RG111 differentiates between the analysis required for control transactions and other transactions. In the context of control transactions (whether by takeover bid, scheme of arrangement, the issue of securities or selective capital reduction or buyback), the expert is required to distinguish between “fair” and “reasonable”. A proposal that was “fair and reasonable” or “not fair but reasonable” would be in the best interests of securityholders (being the opinion required under Part 3 of Schedule 8). For most other transactions, the expert is to weigh up the advantages and disadvantages of the proposal for securityholders. This involves a judgement on the part of the expert as to the overall commercial effect of the proposal, the circumstances that have led to the proposal and the alternatives available. The expert must weigh up the advantages and disadvantages of the proposal and form an overall view as to whether the securityholders are likely to be better off if the proposal is implemented than if it is not. If the advantages outweigh the disadvantages, the proposal would be in the best interests of securityholders. RG111 also states that where a demerger or demutualisation involves one or more of a change in the underlying economic interests of securityholders, a change in control or selective treatment of different securityholders, an expert might need to consider whether using the “fair” and “reasonable” tests is appropriate. The Demerger is not a control transaction. Accordingly, Grant Samuel has evaluated the Demerger by assessing the overall impact on the shareholders of Westfield Corporation and formed a judgement as to whether the expected benefits outweigh any disadvantages and risks that might result. By definition, if the advantages outweigh the disadvantages, shareholders are likely to be better off if the Demerger is implemented than if it is not.
2.3 Sources of Information The following information was utilised and relied upon, without independent verification, in preparing this report: Publicly Available Information . the Demerger Booklet (including earlier drafts); . the Demerger Implementation Deed (including earlier drafts); . annual reports of Westfield for the three years ended 31 December 2017; and . press releases, public announcements, media and analyst presentation material and other public filings by Westfield including information available on its website. Non-Public Information provided by Westfield Corporation . confidential documents, board papers, presentations and working papers.
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2.4 Limitations and Reliance on Information Grant Samuel believes that its opinion must be considered as a whole and that selecting portions of the analysis or factors considered by it, without considering all factors and analyses together, could create a misleading view of the process employed and the conclusions reached. Any attempt to do so could lead to undue emphasis on a particular factor or analysis. The preparation of an opinion is a complex process and is not necessarily susceptible to partial analysis or summary. Grant Samuel’s opinion is based on economic, sharemarket, business trading, financial and other conditions and expectations prevailing at the date of this report. These conditions can change significantly over relatively short periods of time. If they did change materially, subsequent to the date of this report, the opinion could be different in these changed circumstances. This report is also based upon financial and other information provided by Westfield and its advisers. Grant Samuel has considered and relied upon this information. Westfield has represented in writing to Grant Samuel that the information provided by it was then, and is now, complete and not incorrect or misleading in any material respect. Grant Samuel has no reason to believe that any material facts have been withheld. The information provided to Grant Samuel has been evaluated through analysis, inquiry and review to the extent that it considers necessary or appropriate for the purposes of forming an opinion as to whether the Demerger is in the best interests of Westfield Corporation shareholders. However, Grant Samuel does not warrant that its inquiries have identified or verified all the matters that an audit, extensive examination or “due diligence” investigation might disclose. While Grant Samuel has made what it considers to be appropriate inquiries for the purposes of forming its opinion, “due diligence” of the type undertaken by companies and their advisers in relation to, for example, prospectuses or profit forecasts, is beyond the scope of an independent expert. Accordingly, this report and the opinions expressed in it should be considered more in the nature of an overall review of the anticipated commercial and financial implications rather than a comprehensive audit or investigation of detailed matters. An important part of the information used in forming an opinion of the kind expressed in this report is comprised of the opinions and judgement of management. This type of information was also evaluated through analysis, inquiry and review to the extent practical. However, such information is often not capable of external verification or validation. Preparation of this report does not imply that Grant Samuel has audited in any way the management accounts or other records of Westfield Corporation, Westfield or OneMarket. It is understood that the accounting information that was provided was prepared in accordance with generally accepted accounting principles and in a manner consistent with the method of accounting in previous years (except where noted). The information provided to Grant Samuel included the OneMarket historical statements of profit and loss, cash flow and financial position, pro forma historical statement of financial position as at 31 December 2017 (“historical financial information”) and expected cash requirements. Westfield is responsible for this financial information. The OneMarket historical financial information was subject to review by Ernst & Young. The Independent Limited Assurance Report is set out in Annexure B to the Demerger Booklet. On this basis, Grant Samuel considers that there are reasonable grounds to believe that the historical financial information presented in the Demerger Booklet has been prepared on a reasonable basis. In forming its opinion, Grant Samuel has also assumed that: . matters such as title, compliance with laws and regulations and contracts in place are in good standing and will remain so and that there are no material legal proceedings, other than as publicly disclosed;
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. the assessments by Westfield Corporation and its advisers with regard to legal, regulatory, tax and accounting matters relating to the Demerger are accurate and complete; . the information set out in the Demerger Booklet sent by Westfield Corporation to its shareholders is complete, accurate and fairly presented in all material respects; . the publicly available information relied on by Grant Samuel in its analysis was accurate and not misleading; . the Demerger will be implemented in accordance with its terms; and . the legal mechanisms to implement the Demerger are correct and will be effective. To the extent that there are legal issues relating to assets, properties, or business interests or issues relating to compliance with applicable laws, regulations, and policies, Grant Samuel assumes no responsibility and offers no legal opinion or interpretation on any issue.
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3 Impact of the Demerger on Westfield
3.1 Structure and Ownership The simplified structure and ownership of Westfield prior to the Demerger is shown below:
WESTFIELD STRUCTURE – PRIOR TO THE DEMERGER
EXISTING WESTFIELD SECURITYHOLDERS1
100% WESTFIELD GROUP
WESTFIELD stapled WESTFIELD AMERICA stapled CORPORATION WFD TRUST TRUST LIMITED
100% 100%
ONEMARKET WCL HOLDINGS LIMITED LIMITED
90% 10%
ONEMARKET HOLDINGS, INC. (US COMPANY)
100%
Note 1: Each Westfield securityholder holds an equal number of ONEMARKET shares in Westfield Corporation Limited, units in BUSINESS Westfield America Trust and units in WFD Trust that are stapled together The immediate effect of the Demerger on Westfield’s structure and ownership is shown below:
WESTFIELD/ONEMARKET STRUCTURE – AFTER THE DEMERGER
EXISTING WESTFIELD SECURITYHOLDERS
100% 100% WESTFIELD GROUP
WESTFIELD stapled WESTFIELD AMERICA stapled ONEMARKET CORPORATION WFD TRUST TRUST LIMITED LIMITED
90% 10%
ONEMARKET OPERATING GROUP ONEMARKET HOLDINGS, INC. (US COMPANY)
100%
ONEMARKET BUSINESS
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Following the Demerger, the relative ownership interest held by each Westfield Corporation shareholder (other than selling shareholders) in OneMarket will be equal to their ownership interest in Westfield Corporation immediately prior to the Demerger. However, the ownership interest will be held 90% directly and 10% indirectly (through Westfield Corporation). The Demerger is a part of the broader Unibail-Rodamco Transaction under which Unibail-Rodamco will acquire 100% of Westfield for a combination of cash and new stapled shares in Unibail-Rodamco, creating a new larger listed entity (“the New Group”). The Demerger is conditional on the Unibail-Rodamco Transaction being approved. Accordingly, if the Demerger is implemented, the ultimate ownership structure will be as shown below:
UNIBAIL-RODAMCO/ONEMARKET STRUCTURE – POST THE UNIBAIL-RODAMCO TRANSACTION
EXISTING EXISTING WESTFIELD UNIBAIL-RODAMCO SECURITYHOLDERS SHAREHOLDERS 28% 72% NEW GROUP
100% UNIBAIL-RODAMCO stapled UNIBAIL-RODAMCO SE N.V. 40%
WESTFIELD WESTFIELD AMERICA ONEMARKET CORPORATION WFD TRUST TRUST LIMITED LIMITED
90% 10%
ONEMARKET OPERATING GROUP ONEMARKET HOLDINGS, INC. (US COMPANY)
100%
ONEMARKET BUSINESS
The interests of OneMarket and the New Group in OM Delaware will be diluted following implementation of the equity incentive plan.
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3.2 Financial Performance and Position Key financial statistics for Westfield for the two years ended 31 December 2017 are summarised below:
WESTFIELD – KEY FINANCIAL INFORMATION (US$ MILLIONS)
YEAR ENDED 31 DECEMBER
2016 2017 Proportionate Financial Performance Trading EBIT5 750.2 820.9 Profit after tax attributable to Westfield securityholders 1,366.1 1,551.2 Funds from operations 700.4 706.8 Proportionate Financial Position Total property assets6 19,076.2 21,723.1 Net borrowings 7,837.9 8,880.7 Net assets attributable to Westfield securityholders 9,550.0 10,805.5 Westfield The primary financial impacts of the Demerger on Westfield will be: . an increase in net borrowings as a result of the cash injected into OneMarket (US$197.0 million as at 31 December 2017); . a decrease in net assets (US$300.4 million as at 31 December 2017); . an improvement in operating cash flow through elimination of OneMarket’s current cash operating losses. Cash operating losses were US$39.2 million in CY167 and US$67.9 million in CY17. OneMarket’s “cash burn” for CY18 is expected to be approximately US$83 million (US$6.9 million per month); and . an increase in operating earnings through elimination of OneMarket’s operating losses. After capitalisation of certain costs, the OneMarket business contributed a net loss of US$20.5 million in CY17.
______5 Trading EBIT is earnings before net interest, tax and significant and non-recurring items (including property revaluations, fair value adjustments, gain/loss from capital transactions and intangible amortisation and impairment). It includes Westfield’s share of EBIT from equity accounted investments. 6 Total property assets include retail property investments, development projects and construction in progress and inventories. 7 CYXX is the year end 31 December 20XX.
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4 Profile of OneMarket
4.1 Strategy and Operations OneMarket is an early stage technology business whose objective is to develop a retail technology network to help “bricks and mortar” retailers to address the issues facing the retail industry and to compete more effectively in the evolving retail environment, including through their online offerings. Strategy OneMarket’s business strategy is to use its technology platform to develop product offerings that bring together a broad network of retailers, brands, shopping venues and technology companies (collectively known as “network participants”). The objective of the OneMarket network is to rapidly implement new technologies at scale, to facilitate collaboration in the retail industry and to utilise comprehensive consumer data to provide network participants with insights and intelligence regarding their customers. OneMarket aims to offer opportunities to network participants to: . strengthen customer engagement by providing access to products that seek to exploit new technologies such as artificial intelligence/machine learning, natural language processing and augmented reality; . enhance their ability to employ technology in a cost effective manner by providing access to the latest technology, reducing the need for them to develop this technology in-house; and . bridge the data gap by applying machine learning and other techniques to give a more comprehensive understanding of their consumers and the products they browse and buy. Since the establishment of this strategy in January 2017, OneMarket has been investing in its technology platform. This platform is the underlying infrastructure that provides a common set of capabilities and enabling technologies that can be accessed by network participants through OneMarket products. Key capabilities of the platform being developed include consumer identification, communication with consumers, location data and logic capabilities. OneMarket believes that its technology platform and the products being developed for the network will help “bricks and mortar” retailers compete more successfully (including through their online offerings) with non-traditional participants in the retail sector. Operations OneMarket’s current operations are focussed on: . development of the overall technology platform; and . development of a suite of initial products including8: • Live Receipts;
• Intelligent Parking Technology;
• Shopper Exchange;
• Shopper Intelligence; and
• Shopper Profiles. These products (or enhanced versions of existing products) are currently live or expected to be released during CY18. OneMarket expects to continue to upgrade these products and to develop other new products.
______8 These product names are not necessarily market-facing product names.
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At this stage there are only three “signed up” clients that have entered into network participation agreements with OneMarket, including: . Westfield (for the Shopper Exchange product and elements of OneMarket’s Shopper Intelligence and Shopper Profile products for certain Westfield venues based on Westfield’s needs, including Westfield’s flagship properties in the United States and the United Kingdom). In addition, Westfield and OneMarket have entered into a term sheet under which they agree to negotiate in good faith an agreement for Westfield to sign up for OneMarket’s Intelligent Parking Technology product by 15 April 2018; and . Nordstrom, Inc. (for the Shopper Exchange and Live Receipts products). OneMarket is also in active discussions with a range of other potential clients and partners that are at various stages of engagement. OneMarket is based in San Francisco with an additional office in London (servicing the European market). Section 4 of the Demerger Booklet sets out a more detailed profile of OneMarket’s business strategy and operations.
4.2 Financial Profile Financial Information Historically, OneMarket was not a legal or a reporting entity and has not been required to prepare stand alone consolidated financial statements. As a result, special purpose financial statements have been prepared for the purpose of presenting the financial performance and financial position of OneMarket. OneMarket’s historical financial performance for the three years ended 31 December 2017 (including a description of the basis of preparation) is set out in Sections 5.2 and 5.3(a) of the Demerger Booklet and is summarised below:
ONEMARKET – HISTORICAL FINANCIAL PERFORMANCE (US$ MILLIONS)
YEAR ENDED 31 DECEMBER
2015 2016 2017 Revenue - - 2.2 Employee expenses (2.1) (19.7) (45.9) Deferred employee costs (0.1) (1.2) (3.6) Administration and other expenses (0.4) (10.9) (16.1) Corporate overheads (1.6) (7.6) (9.8) Depreciation and amortisation (0.6) (0.6) (0.5) Trading EBIT (4.8) (40.0) (73.7) Impairment of assets - - (57.0) Fair value writedown of investments (1.8) (3.3) (1.3) Capital transaction costs - - (1.4) Operating loss before tax (6.6) (43.3) (133.4) Income tax benefit - - - Net loss after tax (6.6) (43.3) (133.4) Demerger Booklet and Grant Samuel analysis
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The historical financial performance has been prepared on the following basis: . entities acquired during CY17 (12 Digit Marketing, Inc. (“12 Digit”), an advertising technology company, Yocuda Limited (“Yocuda”), a technology company specialising in live receipts and Fluid M, Inc. (“FluidM”), an early stage start up business focussed on intelligent, context aware voice assistance across different communication interfaces), have been included from the date control was obtained by Westfield Corporation (as if the acquisition had been made by OneMarket as a stand alone business); . acquired goodwill has been impaired in full at each balance date as OneMarket is an early stage technology operation with revenues unable to be forecast with sufficient reliability to support the carrying value of acquired goodwill; . expenses incurred by Westfield’s retail technology business and attributable to OneMarket have been determined on the basis of time incurred (direct workforce costs, management costs, costs of senior Westfield executives), actual cost incurred (other direct costs) or proportion of costs relative to Westfield’s retail technology business total expenses (indirect costs, overheads); and . no adjustments have been made to reflect: • the operation of OneMarket as a stand alone business. On implementation of the Demerger: - an allocation of Westfield corporate overheads will no longer be charged to OneMarket. As a stand alone business, OneMarket is expected to incur US$3.9 million per annum of corporate overheads (including costs associated with being a listed entity). Even adjusting for these lower corporate overhead, the trading EBIT losses are substantial (US$7.1 million in CY15, US$36.3 million in CY16 and US$67.8 million in CY17); and - employee awards granted to Westfield employees assigned to OneMarket will be settled by Westfield and no further awards from Westfield will be provided (although a new employee compensation plan will come into effect); and
• OneMarket’s initial 90% interest in OM Delaware (i.e. the historical financial performance represents 100% of the OneMarket business). The increase in trading EBIT losses over the period is primarily due to an increase in: . employee costs associated with the engineering effort to build the technology platform, acquisitions and additional sales and back office personnel; . administration and other expenses due to additional facilities costs and back office functions to support the increased headcount; and . corporate overheads due to an increasing allocation of costs based on the time spent on OneMarket products compared to Westfield products. The trading losses are substantially greater than those reported by Westfield (see Section 3.2) as Westfield capitalised a number of operating costs related to product development. OneMarket’s historical and pro forma financial position as at 31 December 2017 (including a description of the assumptions and adjustments made) is set out in Section 5.3(c) of the Demerger Booklet and is summarised below:
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ONEMARKET – HISTORICAL AND PRO FORMA FINANCIAL POSITION (US$ MILLIONS)
AS AT 31 DECEMBER 2017
HISTORICAL PRO FORMA Cash 197.0 197.0 Other assets 2.6 2.6 Total assets 199.6 199.6 Contingent and deferred consideration 5.4 5.4 Other liabilities 6.6 2.5 Total liabilities 12.0 7.9
Net assets 187.6 191.7 Net assets attributable to external non controlling interests - 19.2 Net assets attributable to OneMarket shareholders 187.6 172.5 Demerger Booklet and Grant Samuel analysis OneMarket’s pro forma financial position has been prepared on the following basis: . the Demerger was implemented on 31 December 2017; and . adjustments have been made to reflect: • transaction costs associated with the Demerger that are attributable to OneMarket of approximately US$2.5 million;
• settlement of the US$6.6 million provision for employee stock awards by Westfield; and
• the 10% economic interest in the OneMarket business that will be retained by Westfield. OneMarket had no borrowings as at 31 December 2017. Other than cash, its only assets were plant and equipment (US$2.2 million) and an unlisted investment (US$0.3 million, at fair value). In addition, as at 31 December 2017, OneMarket had: . contractual obligations and commitments in relation to operating lease payments of US$2.2 million (in less than one year) and US$2.3 million (in 2-5 years); and . certain contingent purchase price obligations in relation to its CY17 acquisitions: • the fair value of the contingent consideration in relation to 12 Digit is estimated to be US$9.4 million, US$2.9 million of which has been provided for as an acquisition cost. The remining US$6.5 million is payable to employees of OneMarket and will be treated as an employment cost and expense in the year that the performance hurdles are met. In addition, the former stockholders and certain former employees of 12 Digit have the right to receive contingent consideration of up to US$85 million if certain financial targets are achieved. The earn out obligation expires on 31 December 2020. A process has commenced in relation to the calculation of the contingent consideration payable by OneMarket in relation to the acquisition of 12 Digit. Details of this process are set out in Section 8.8 of the Demerger Booklet;
• a final US$0.5 million milestone payment is due to be paid to the former owners of FluidM in January 2019; and
• US$1.2 million of contingent consideration and other employee compensation commitments related to two key employees of Yocuda who held stock or options in Yocuda and who are current employees of OneMarket. This contingent consideration is treated as an employee benefit.
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Funding Strategy While OneMarket believes that it has sufficient cash to meet its cash needs until late 2019, it expects to commence seeking additional funding prior to that time. Funding could include: . additional equity (via entitlement offers or placements) and/or debt in OneMarket; and . additional equity or debt into OM Delaware. Sources of funding could include potential network partners, similar businesses outside the United States, strategic investors, private equity and/or venture capital investors.
4.3 Directors and Management The directors of OneMarket will be: . Steven Lowy (Non Executive Chairman); . Donald Kingsborough (Chief Executive Officer); . Ilana Atlas (Non Executive); . Mark Johnson (Non Executive); and . Brian Long (Non Executive). Mr Lowy, Ms Atlas, Mr Johnson and Mr Kingsborough are all existing directors of Westfield Corporation. Mr Kingsborough is also the existing Chief Executive Officer of OneMarket and has been an executive of Westfield since 2016. Mr Lowy and Mr Kingsborough are also directors of OM Delaware. Mr Kingsborough and the entire management team and employees of the OneMarket business operated by Westfield Corporation have transferred to the OneMarket Group. It is also intended that Simon Tuxen, the current General Counsel and Company Secretary of Westfield, will be employed by OneMarket as Company Secretary. OneMarket currently does not have any plans to add other staff in Australia.
4.4 Risk Factors OneMarket will be subject to a different set of risks than Westfield and Unibail-Rodamco because it is essentially an early stage technology business and the long term viability of the business is uncertain. These risks include: . technical failure of (or difficulties with) the products including upgrades and new products; . attracting sufficient clients to create an effective network that delivers valuable insights and services; . revenue generating ability (pricing, volume of activity etc); . securing adequate funding beyond late 2019; . threats from potential competitors (even if only for particular parts of the offering); . retention of existing staff and management and attraction of new employees with appropriate skills and expertise; and . regulatory impediments (e.g. privacy issues). Westfield Corporation shareholders should read the risks to which OneMarket is exposed that are set out in Section 6 of the Demerger Booklet.
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5 Evaluation of the Demerger
5.1 Background to the Demerger The origins of the OneMarket business can be traced to the establishment of Westfield Labs, a business unit created in 2012 with a goal of utilising digital technologies to enhance customer experiences and assisting retailers operating in Westfield shopping centres to meet the challenge of advances in online retailing. While Westfield Labs did introduce a number of successful innovations and began development of its data platform, management formed the view that a broader strategy incorporating a wider set of retailers as well as other shopping venue operators and operating as an integrated network, was necessary to be more effective and to fully exploit the opportunity. To this end, Westfield Retail Solutions was established in January 2017 with an objective of creating an industry network of retailers, brands, shopping venues and technology companies that would utilise technology to compete against online retailers. The intent was to capture and analyse data to develop a better understanding of customers and then use that data to enable delivery of a seamless shopping experience. A key element of the strategy was for Westfield Retail Services to become a trusted, independent service provider to all retailers and venues rather than one servicing Westfield’s interests only. The business was rebranded as OneMarket in November 2017. Given this shift in strategy, a separation of OneMarket (whether through sale, demerger or initial public offering) was inevitable at some stage (given the potential for conflicts of interest and the fundamental differences to the core business of Westfield) and arguably necessary to maximise the likelihood of achieving the overall objectives of the business. A separation would offer a number of benefits, chiefly relating to the perception of independence as well as structural, operational and financial flexibility. The Unibail-Rodamco Transaction, under which Westfield will be acquired by Unibail-Rodamco (Europe’s largest shopping centre owner) provided a catalyst to advance the plans for separation of OneMarket, in part because Unibail-Rodamco: . indicated a lesser degree of interest/commitment to developing and funding the business going forward; and . was not prepared to attribute material value to the business in setting the terms of the transaction. In view of this position, Westfield considered a number of alternatives to the Demerger in negotiating the terms of the Unibail-Rodamco Transaction including: . sale of the OneMarket business; . closure of the OneMarket business; . demerger of OneMarket to an unlisted entity or an entity listed on a stock exchange other than the ASX; and . delaying the separation by retaining the OneMarket business within Westfield for a period of time (it therefore would become a wholly owned subsidiary of Unibail-Rodamco if the Unibail-Rodamco Transaction is approved). The Directors of Westfield determined that Demerger provided the best outcome for Westfield securityholders both in terms of capturing any value of the business in the short term as well as maximising the opportunity to participate in long term value creation.
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5.2 Approach to Evaluation Westfield Corporation shareholders are being asked to split their current investment into two parts, a shareholding in Westfield Corporation post Demerger (which will continue to be stapled to Westfield America Trust units and WFT units and will be acquired by Unibail-Rodamco) and a separate shareholding in OneMarket. The transaction is a “clean” split in so far as there is no change in the underlying economic interest of each shareholder (except for selling shareholders). They will, in aggregate, continue to own 100% of the OneMarket business, but in a different form, with 90% held directly and 10% owned indirectly through their ongoing securityholding in Westfield post Demerger (although that 10% interest will be part of the assets effectively sold to Unibail-Rodamco as part of the Unibail-Rodamco Transaction). Under the Demerger there is: . no purchase or sale of equity in either OneMarket or Westfield post Demerger to third parties; . no value leakage to third parties from either entity; and . no adverse tax consequences for the separate entities and the tax consequences for the vast majority of Westfield Corporation shareholders will be minimal (see Section 5.6). Accordingly, the Demerger is definitionally fair as shareholders (except selling shareholders) will hold exactly the same underlying economic interests in the OneMarket business before and after the Demerger is implemented. Evaluation of whether or not the Demerger is in the best interests of shareholders therefore involves assessment of whether or not there is a net benefit of the proposal for shareholders. This involves consideration of the advantages and benefits weighed against the disadvantages, costs and risks. These largely involve subjective judgements rather than analysis of quantifiable financial or other verifiable factors.
5.3 Opinion In Grant Samuel’s opinion, the Demerger is in the best interests of Westfield Corporation shareholders.
5.4 Analysis The terms of the Unibail-Rodamco Transaction mean that, irrespective of any other net benefits, there is a clear and compelling reason for Westfield Corporation shareholders to vote in favour of the Demerger. The Demerger will only proceed if the Unibail-Rodamco Transaction is separately approved by Westfield securityholders. If the Unibail-Rodamco Transaction is not approved, nothing will occur and the status quo (100% ownership of OneMarket by Westfield) will remain even if shareholders voted in favour of the Demerger. If the Unibail-Rodamco Transaction is approved, but shareholders vote against the Demerger, there will be no change to the consideration to be paid by Unibail-Rodamco to Westfield securityholders (i.e. there is no increase to reflect the value of, or the cash within, OneMarket). Accordingly, if the Unibail- Rodamco Transaction is approved but the Demerger is not, Westfield securityholders will, in aggregate, effectively give up a potential 90% interest in the OneMarket business for nil consideration (although, as they will have a 28% interest in the New Group, their effective loss is 64.8% of the value of OneMarket9).
______9 The 64.8% effective loss of value is calculated as 92.8% less 28%: - if the Demerger proceeds, Westfield securityholders will, in aggregate, hold 90% + 10% x 28% = 92.8% of the OneMarket business. 90% will be held directly through OneMarket and 2.8% will be held indirectly through the New Group’s 10% interest in OM Delaware. Westfield securityholders will have an aggregate 28% interest in the New Group; and - if the Demerger does not proceed, Westfield securityholders will, in aggregate, hold 28% of OneMarket (through their aggregate interest in the New Group).
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Given the early stage of OneMarket’s development, its limited revenues and significant cash operating losses (approximately US$83 million per annum), assessing a likely market value for OneMarket shares is extremely difficult. However, one way of measuring the loss is the cash asset backing. It is expected that the OneMarket Group will have cash resources of approximately US$160 million on the date the Demerger is implemented (around 31 May 2018). If the Demerger is not approved (but the Unibail-Rodamco Transaction is approved), Westfield shareholders will effectively give Unibail-Rodamco, in aggregate, approximately US$160 million in cash (to spend on development of the OneMarket business or not as it chooses) for no consideration. On this basis, the aggregate net loss of value to Westfield securityholders would be approximately US$104 million (64.8% of the cash backing of OneMarket). Even if OneMarket shares were expected to trade at levels well below the cash asset backing, Westfield securityholders would still be forgoing a meaningful amount of value that they could have captured by selling the OneMarket shares received under the Demerger. Moreover, they would have a much reduced (28% compared to 92.8%) effective share of the potential long term value that might be created if OneMarket is able to successfully build out its business and realise its potential. There are a number of other advantages and benefits from a demerger of OneMarket: . unarguable independence from any particular participant with a clear focus on industry wide improvements. In turn, this should lead to better engagement and stronger relationships with key partners; . greater flexibility to offer equity participation to potential partners across the spectrum including retailers, brands, other venue operators and technology providers; . greater flexibility to seek merger partners; . freedom to pursue alternative financial strategies and structures; . a board and senior management team that will be focussed solely on OneMarket; . the “drive to deliver” that should come from the discipline of being a listed company reporting regularly to its own shareholders coupled with its limited financial resources; and . the ability to offer staff incentives directly linked to the creation of value in OneMarket. These are largely factors that are expected to increase the likelihood of OneMarket’s business strategy being successful over the longer term. Additionally, the Demerger will give Westfield securityholders the flexibility to manage their exposure to the OneMarket business. Given the nature of the business and its risk profile, attitudes to an investment in OneMarket are likely to differ markedly amongst securityholders. Following the Demerger, securityholders will be able to each elect whether to sell their OneMarket shares in the short term or hold for the longer term. The Demerger does involve a number of disadvantages, costs and risks. The most significant of these are: . OneMarket is an early stage business with largely untested products and a unique, untried and evolving business model. There is no certainty that it will be successful. In particular, OneMarket has limited financial resources (an expected US$160 million in cash on implementation of the Demerger) and relatively high operating cash losses (approximately US$83 million per annum). OneMarket has funding in place to cover the period until late 2019. Continuation of operations beyond that date for any significant period of time will require, in the absence of meaningful revenues in this period, the raising of new funds (for example debt or, more likely, additional equity to either OneMarket or OM Delaware, the main operating subsidiary). Potentially, this could involve OneMarket shareholders being asked to participate in these raisings (e.g. via a rights issue).
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Raising funds for new ventures can be very challenging and, if this is not able to be achieved, OneMarket may need to cease operations. In any event, there is a risk that even over the medium to longer term, the business may fail to generate sufficient revenues to cover its operating costs and prove not to be a viable business. In short, there is a risk that value may ultimately dissipate to zero. In contrast, Westfield would have the financial resources to continue to invest in the OneMarket business for many years although its willingness to do so would undoubtedly depend on the level of progress achieved; . Westfield is clearly a critical client for the OneMarket business going forward. Post the Demerger and the Unibail-Rodamco Transaction, Unibail-Rodamco will only have an initial 10% interest in the business (which may be further diluted in due course). As such, there is greater potential for the relationship to be less committed over time than under the current 100% Westfield ownership; . the trading price of OneMarket shares may be adversely impacted by a number of issues for a considerable period of time:
• OneMarket is a very minor asset in the context of the Westfield group as whole. At its cash asset backing, it represents approximately 1% of Westfield’s market capitalisation. Accordingly, many securityholders will receive parcels of shares with a small market value (e.g. even for a Westfield holding worth US$100,000, the cash asset backing of OneMarket shares received will be less than US$1,000). As a result, there may be a significant number of shareholders electing to sell their OneMarket shares because it is not worth their while to keep them in their portfolio;
• there may be other securityholders who elect to sell for other reasons. For example, investors who have invested in Westfield as a real estate investment trust (“REIT”) exposure and may have no interest in retaining an interest in what is essentially an early stage technology company. This is likely to be particularly the case for institutional REIT investors; and
• there are few drivers to attract new investors: - at least initially OneMarket is likely to have a small market capitalisation and will not qualify for any significant indices used by institutional investors (thus ruling out buying by any index fund investors); - OneMarket’s primary opportunity is the United States and its operations are based there. United States investors who may be interested in the business could be deterred by having to invest through an Australian entity listed on the ASX; and - positive cash flow and dividends are, realistically, some years away. Further, these factors will impact on the general liquidity of OneMarket shares. There is a risk that there will not be an active market initially for OneMarket shares nor will one develop over time; . the Demerger will result in OneMarket incurring ongoing costs of approximately US$3.9 million per annum associated with operating as a stand alone company including listed company costs (share registry, directors fee etc). These costs would not be incurred under continued Westfield ownership (although OneMarket would continue to be allocated a portion of Westfield’s corporate overheads); . there are risks in the transition to a stand alone company including establishment of effective governance arrangements, operating procedures and systems at the corporate level including establishing its own accounting, treasury, secretarial, insurance, legal and human resource functions. In addition, there is a risk that the costs will be greater than the level of costs currently allocated by Westfield. However, separations of this nature are a well worn path that ought to be relatively straightforward; and . transaction costs associated with the Demerger (as opposed to the Unibail-Rodamco Transaction) are estimated to be approximately US$2.5 million.
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Section 6 of the Demerger Booklet sets out a number of other risks associated with the Demerger and with OneMarket’s business. The disadvantages, costs and risks are not trivial but, in Grant Samuel’s opinion, are outweighed by the advantages and benefits, in particular, the avoidance of a loss of value (in favour of Unibail-Rodamco’s existing shareholders). There are alternatives to the Demerger but they each have significant drawbacks that make them inferior to the Demerger: . a sale of the OneMarket business would be time consuming and difficult to achieve. There are no obvious buyers and the current level of cash burn (and absence of revenue) would be a significant deterrent. Westfield securityholders would also lose the exposure to any potential long term value creation; . closure of the business would have preserved the cash that is to be effectively transferred to establish OneMarket on a stand alone basis (US$160 million) which may have then been able to be reflected in the offer price for Westfield but:
• there would have been winding up costs; and
• the opportunity for long term value creation in OneMarket would have been lost. Westfield management believes that, while the risks inherent in the business are substantial and there is no guarantee of success: - there is demand from retailers and venues for technology, data and services that will help them compete with online retailers; and - OneMarket is well placed to serve that need given the relationships it has established and the expertise that it has accumulated since 2012; . a demerger into an unlisted vehicle would make it difficult for securityholders to realise their investment in OneMarket and, given Westfield’s history and the composition of its register, it makes most sense for OneMarket to be listed on the ASX. The listing could be changed in due course if circumstances make it advantageous to do so; and . as the terms of the Unibail-Rodamco Transaction will not alter, delaying the Demerger would result in the effective loss of 64.8% of the value of OneMarket for Westfield securityholders. Having regard to all of these factors, it is Grant Samuel’s view that Westfield Corporation shareholders will be better off if they vote in favour of the Demerger. Accordingly, in Grant Samuel’s opinion, the Demerger is in the best interests of Westfield Corporation shareholders. There are some grounds on which shareholders could consider voting against the Demerger, specifically if: . they intended to vote against the Unibail-Rodamco Transaction; . they believed that: • the OneMarket business will never succeed;
• OneMarket shares will trade at less than 28% of cash asset backing; and
• Unibail-Rodamco would close the business (at minimal cost) and deploy the cash elsewhere for a positive return; or . they believed that under 100% ownership by Unibail-Rodamco, the OneMarket business would be vastly more successful than as an independently listed business (by a factor of at least three times).
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However: . voting against the Demerger has no impact on the outcome of the Unibail-Rodamco Transaction and if that scheme is nevertheless approved, securityholders would be better off receiving the OneMarket shares than not; and . Grant Samuel considers the latter two points to be unlikely scenarios.
5.5 Other Considerations Ineligible Foreign Shareholders Some Westfield Corporation shareholders with registered addresses outside Australia and its external territories and New Zealand will be ineligible to receive OneMarket shares. The shares will be sold through a sale facility with the proceeds returned to shareholders. Shareholders will be liable for any capital gains tax payable on the proceeds. However, wholesale/professional investors in many jurisdictions (e.g. the United States and the United Kingdom) will be eligible to receive OneMarket shares. Westfield estimates that ineligible shareholders will represent only approximately 0.025% of Westfield Corporation’s share capital. While some of these shareholders may have preferred to receive OneMarket shares: . they will receive a market value from the sale; . the market value of OneMarket shares is likely to be immaterial relative to any shareholders’ investment in Westfield. The cash asset backing of OneMarket shares issued is around 1% of the value of Westfield securities; and . shareholders can acquire OneMarket shares on market post Demerger if they wish to gain an exposure to OneMarket. Small Shareholders For many smaller securityholders in Westfield, the market value of the OneMarket shares that they would receive will be de minimis. The cash asset backing of the OneMarket shares received will be about 1% of the market value of a Westfield securityholding. Such a small holding (which may be an “unmarketable parcel”) will be little more than an irritation and possibly difficult to sell on market. Shareholders with 10,000 or fewer Westfield Corporation shares (i.e. 10,000 Westfield stapled securities) will have the option of electing to sell their shares to which they would have been entitled through a sale facility.
5.6 Tax Implications Section 7 of the Demerger Booklet contains an overview of the Australian tax implications of the Demerger for Westfield securityholders. As the tax consequences can vary significantly across individual investors, Westfield securityholders should: . review Section 7 of the Demerger Booklet in detail; and . seek advice from their own tax adviser as to the specific impacts of the Demerger on their personal position. For tax purposes, Westfield securityholders will receive a total distribution comprising the Demerger Dividend and the Capital Reduction. The amount of the distribution will not be known until after the Demerger is implemented as it will be based on the trading price of OneMarket shares on the ASX in a period immediately following listing.
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For Australian resident securityholders that are subject to the capital gains tax regime, the tax impacts should be minimal: . the Demerger will not quality for demerger relief: • the first A$150 million of the distribution will be the Demerger Dividend and will be treated as an unfranked dividend (equivalent to up to A$0.07 per Westfield security or up to A$1.44 per OneMarket share); and
• the amount of the distribution in excess of A$150 million (if any) will be the Capital Reduction; . the amount of the unfranked dividend will be included in each securityholder’s assessable income in the relevant income year (the year ending 30 June 2018 for Australian resident shareholders). No franking credit will attach to the unfranked dividend and tax will be payable on the full amount of the dividend at each securityholder’s marginal tax rate. However:
• the amount of tax payable is immaterial in the context of an investor’s holding of Westfield securities; and
• shareholders will receive US$2.67 per Westfield security in cash if the Unibail-Rodamco Transaction is approved; . the amount of the Capital Reduction will be deducted from the cost base of each securityholder’s investment in Westfield Corporation shares. To the extent the Capital Reduction exceeds the cost base, the surplus will be taxable; and . the cost base of the OneMarket shares received will be equal to the total distribution (i.e. the Demerger Dividend plus any Capital Reduction). For Westfield securityholders who are non-residents of Australia for tax purposes, the Demerger Dividend will be exempt from Australian withholding tax (as it will be declared by Westfield to be “conduit foreign income”) and the Capital Reduction should have no Australian capital gains tax implications.
5.7 Capital Reduction Definitionally, a reduction of capital adversely impacts creditors of a business. The financial impacts of the Demerger and Capital Reduction on Westfield are set out in Section 3.2 of this report. As can be seen from that data: . the Demerger results in some negative impacts on Westfield (increased net borrowings and reduced net assets) and some positive impacts (improved operating cash flow and reported earnings); and . the impact of the Demerger is immaterial in the context of the Westfield group as a whole. The adverse effects of increased net borrowings and reduced net assets are in the order of 2-3%. It is even less material in the context of the New Group (which, given that the Demerger is conditional on the Unibail-Rodamco Transaction occurring, is arguably the more relevant test). Existing creditors of the OneMarket business will no longer have the support of the Westfield group but: . pro forma liabilities amounted to only US$7.9 million as at 31 December 2017; . OneMarket will have a substantial cash balance (estimated to be US$160 million at the Demerger date), no indebtedness and sufficient financial resources to meet liabilities until late 2019); and . the vast majority of OneMarket creditors (who are in the nature of trade creditors) will have had existing exposures repaid by late 2019 and will have been able to make their own decision to continue to make further credit available to OneMarket.
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Accordingly, it is Grant Samuel’s opinion that existing creditors of the Westfield group are not materially prejudiced by the Capital Reduction. Grant Samuel makes no warranty, express or implied, as to the potential recoverability of existing or contingent debts owed by Westfield at the date of this report or at any subsequent time. Grant Samuel’s opinion relates only to the impact of the Demerger on Westfield’s ability to pay its existing creditors. Future creditors must rely on their own investigations of the financial position of the New Group or OneMarket as appropriate.
5.8 Shareholder Decision Grant Samuel has been engaged to prepare an independent expert’s report setting out whether in its opinion the Demerger is in the best interests of shareholders and to state reasons for that opinion. Grant Samuel has not been engaged to provide a recommendation to shareholders in relation to the Demerger, the responsibility for which lies with the directors of Westfield Corporation. In any event, the decision whether to vote for or against the Demerger is a matter for individual shareholders based on each shareholder’s views as to value and business strategy, their expectations about future economic and market conditions and their particular circumstances including risk profile, liquidity preference, investment strategy, portfolio structure and tax position. In particular, taxation consequences may vary from shareholder to shareholder. If in any doubt as to the action they should take in relation to the Demerger, shareholders should consult their own professional adviser. Similarly, it is a matter for individual securityholders as to whether to buy, hold or sell securities in Westfield (before or after the Demerger) or shares in OneMarket. This is an investment decision upon which Grant Samuel does not offer an opinion and independent of a decision on whether to vote for or against the Demerger. Securityholders should consult their own professional adviser in this regard.
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6 Qualifications, Declarations and Consents
6.1 Qualifications The Grant Samuel group of companies provide corporate advisory services in relation to mergers and acquisitions, capital raisings, debt raisings, corporate restructurings and financial matters generally. The primary activity of Grant Samuel & Associates Pty Limited is the preparation of corporate and business valuations and the provision of independent advice and expert’s reports in connection with mergers and acquisitions, takeovers and capital reconstructions. Since inception in 1988, Grant Samuel and its related companies have prepared more than 545 public independent expert and appraisal reports. The persons responsible for preparing this report on behalf of Grant Samuel are Stephen Wilson BCom MCom(Hons) CA SF Fin and Jaye Gardner BCom LLB(Hons) CA SF Fin GAICD. Both have a significant number of years of experience in relevant corporate advisory matters. Each of the above persons is a representative of Grant Samuel pursuant to its Australian Financial Services Licence under Part 7.6 of the Corporations Act.
6.2 Disclaimers It is not intended that this report should be used or relied upon for any purpose other than as an expression of Grant Samuel’s opinion as to whether the Demerger is in the best interests of shareholders. Grant Samuel expressly disclaims any liability to any Westfield Corporation shareholder who relies or purports to rely on the report for any other purpose and to any other party who relies or purports to rely on the report for any purpose whatsoever. Grant Samuel has had no involvement in the preparation of the Demerger Booklet issued by Westfield Corporation and has not verified or approved any of the contents of the Demerger Booklet. Grant Samuel does not accept any responsibility for the contents of the Demerger Booklet (except for this report). Grant Samuel has had no involvement in Westfield’s due diligence investigation in relation to the Demerger Booklet and does not accept any responsibility for the completeness or reliability of the process which is the responsibility of Westfield.
6.3 Independence Grant Samuel and its related entities do not have at the date of this report, and have not had within the previous two years, any business or professional relationship with Westfield or any financial or other interest that could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion in relation to the Demerger. Grant Samuel advises that it was retained to prepare the independent expert’s reports in relation to: . the merger of Westfield Group’s Australian and New Zealand businesses with Westfield Retail Trust to form Scentre Group in 2014; and . the merger of Westfield Holdings Limited, Westfield Trust and Westfield America Trust in 2004. Grant Samuel has also been appointed to prepare an independent expert’s report in relation to the Unibail- Rodamco Transaction. Grant Samuel had no part in the formulation of the Demerger. Its only role has been the preparation of this report. Grant Samuel will receive a fixed fee of US$1.8 million for the preparation of the reports on the Demerger and the Unibail-Rodamco Transaction. This fee is not contingent on the conclusions reached or the outcome of the Demerger or the Unibail-Rodamco Transaction. Grant Samuel’s out of pocket expenses in
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relation to the preparation of these reports will be reimbursed. Grant Samuel will receive no other benefit for the preparation of these reports. Grant Samuel considers itself to be independent in terms of Regulatory Guide 112 issued by the ASIC on 30 March 2011.
6.4 Declarations Westfield has agreed that it will indemnify Grant Samuel and its employees and officers in respect of any liability suffered or incurred as a result of or in connection with the preparation of the report. This indemnity will not apply in respect of the proportion of any liability found by a court to be primarily caused by any conduct involving negligence, fraud or wilful misconduct by Grant Samuel. Westfield has also agreed to indemnify Grant Samuel and its employees and officers for time spent and reasonable legal costs and expenses incurred in relation to any inquiry or proceeding initiated by any person. Any claims by Westfield are limited to an amount equal to the fees paid to Grant Samuel. Where Grant Samuel or its employees and officers are found to have been negligent, fraudulent or engaged in wilful misconduct Grant Samuel shall bear the proportion of such costs caused by its action. Advance drafts of this report were provided to Westfield and its advisers. Certain changes were made to the drafting of the report as a result of the circulation of the draft report. There was no alteration to the methodology, evaluation or conclusions as a result of issuing the drafts.
6.5 Consents Grant Samuel consents to the issuing of this report in the form and context in which it is to be included in the Demerger Booklet to be sent to shareholders of Westfield Corporation. Neither the whole nor any part of this report nor any reference thereto may be included in any other document without the prior written consent of Grant Samuel as to the form and context in which it appears.
6.6 Other Grant Samuel has prepared a Financial Services Guide as required by the Corporations Act. The Financial Services Guide is set out at the beginning of this report.
GRANT SAMUEL & ASSOCIATES PTY LIMITED 12 April 2018
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WESTFIELD CORPORATION PROPOSAL // PAGE 141 ANNEXURE B INDEPENDENT LIMITED ASSURANCE REPORT
PAGE 142 // WESTFIELD CORPORATION PROPOSAL Ernst & Young Transaction Advisory Te l : +61 2 9248 5555 Services Limited Fax: +61 2 9248 5959 200 George Street ey.com/au Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001
10 April 2018
The Board of Directors Westfield Corporation Limited Level 29 85 Castlereagh Street Sydney NSW 2000
The Board of Directors OneMarket Limited Level 29 85 Castlereagh Street Sydney NSW 2000
Dear Directors
PART 1 – INDEPENDENT LIMITED ASSURANCE REPORT ON HISTORICAL FINANCIAL INFORMATION AND PRO FORMA HISTORICAL STATEMENT OF FINANCIAL POSITION Introduction
We have been engaged by Westfield Corporation Limited (‘Westfield’’) and OneMarket Limited to report on the historical financial information of that part of Westfield’s retail technology business utilised by OneMarket Limited and its subsidiaries (“OneMarket Group”) to develop its retail technology net ork & product solutions (“OneMarket”) and pro forma historical statement of financial position of OneMarket Group for inclusion in the OneMarket demerger booklet (the “Demerger Booklet”) to be dated on or about 10 April 2018, and to be issued by Westfield for the proposed demerger of OneMarket Limited from Westfield (collectively the “Transaction”).
E pressions and terms defined in the Demerger Booklet have the same meaning in this report.
The nature of this report is such that it can only be issued by an entity hich holds an Australian Financial Services Licence under the Corporations Act 2001. Ernst & Young Transaction Advisory Services Limited (“Ernst & Young Transaction Advisory Services”) holds an appropriate Australian Financial Services Licence (AFS Licence Number 2 0585). Gavin Sultana is a Director and epresentative of Ernst & Young Transaction Advisory Services. We have included our Financial Services Guide as art 2 of this report.
1. Scope Historical Financial Information You have re uested Ernst & Young Transaction Advisory Services to revie the follo ing historical financial information of OneMarket
historical statements of profit and loss for the years ended 31 December 2015 (“FY15”), 31 December 2016 (“FY16”) and 31 December 2017 (“FY17”) as set out in table 5.3.1 of Section 5.3(a) of the Demerger Booklet historical cash flo s for FY15, FY16 and FY17 as set out in table 5.3.2 of Section 5.3(b) of the Demerger Booklet and
A member firm of Ernst & Young Global Limited Ernst & Young Transaction Advisory Services Limited, ABN 87 003 599 844 Australian Financial Services Licence No. 240585
WESTFIELD CORPORATION PROPOSAL // PAGE 143 ANNEXURE B INDEPENDENT LIMITED ASSURANCE REPORT
Ernst & Young Transaction Advisory Te l : +61 2 9248 5555 Services Limited Fax: +61 2 9248 5959 200 George Street ey.com/au Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001
historical statement of financial position as at 31 December 2017 as set out in table 5.3.3 of Section 5.3(c) of the Demerger Booklet, (together “the Historical Financial Information”).
The istorical Financial nformation has been derived from the special purpose financial statements of OneMarket for FY15, FY16 and FY17, hich ere audited by Ernst & Young in accordance ith Australian Auditing Standards. Ernst & Young issued un ualified audit opinions, hich contained an emphasis of matter on the basis of accounting, on these special purpose financial statements.
The istorical Financial nformation has been prepared in accordance ith the basis of preparation, being the recognition and measurement principles of Australian Accounting standards including Australian Accounting nterpretations ( hich are consistent ith nternational Financial eporting Standards (“ F S”) and interpretations issued by the nternational Accounting Standards Board relevant for income statements, statements of financial position and statements of cash flo s ith the e ception of AASB 10 Consolidated Financial Statements.
Pro Forma Historical Statement of Financial Position You have re uested Ernst & Young Transaction Advisory Services to revie the pro forma historical statement of financial position of OneMarket Group as at 31 December 2017 (“Pro Forma istorical Statement of Financial osition”) as set out in table 5.3.3 of Section 5.3(c) of the Demerger Booklet.
(the istorical Financial nformation and ro Forma istorical Statement of Financial osition is collectively referred to the “Financial Information”).
The ro Forma istorical Statement of Financial osition has been derived from the istorical Statement of Financial osition of OneMarket as at 31 December 2017, and ad usted for the effects of pro forma ad ustments described in footnotes 1 to to table 5.3.3 in Section 5.3(c) of the Demerger Booklet.
The ro Forma istorical Statement of Financial osition has been prepared in accordance ith the basis of preparation, being the recognition and measurement principles contained in Australian Accounting Standards and F S, ith the e ception of the re uirements of AASB 10 Consolidated Financial Statements and includes ad ustments hich have been prepared in a manner consistent ith F S that reflect the impact of the Demerger as if it had occurred as at 31 December 2017.
Due to its nature, the ro Forma istorical Statement of Financial osition does not represent OneMarket Limited’s actual or prospective financial position.
The Financial nformation is presented in the Demerger Booklet in an abbreviated form, insofar as it does not include all of the presentation and disclosures re uired by Australian Accounting Standards and other mandatory professional reporting re uirements applicable to general purpose financial reports prepared in accordance ith the Corporations Act 2001.
Directors’ Responsibility The directors of Westfield and OneMarket Limited are responsible for the preparation and presentation of the istorical Financial nformation and ro Forma istorical Statement of Financial osition, including the basis of preparation, selection and determination of pro forma ad ustments made to the istorical Financial nformation and included in the ro Forma istorical Statement of Financial osition. This includes responsibility for such internal controls as the directors determine are necessary to enable the preparation of istorical Financial nformation and ro Forma istorical Statement of Financial osition that are free from material misstatement, hether due to fraud or error.
A member firm of Ernst & Young Global Limited Ernst & Young Transaction Advisory Services Limited, ABN 87 003 599 844 Australian Financial Services Licence No. 240585
PAGE 144 // WESTFIELD CORPORATION PROPOSAL Ernst & Young Transaction Advisory Te l : +61 2 9248 5555 Services Limited Fax: +61 2 9248 5959 200 George Street ey.com/au Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001
r Responsibility
Our responsibility is to express a limited assurance conclusion on the Historical Financial Information and Pro Forma Historical Statement of Financial Position based on the procedures performed and the evidence we have obtained.
We have conducted our engagement in accordance with the Standard on Assurance Engagements ASAE 3450 Assurance Engagements involving Corporate Fundraisings and/or Prospective Financial Information.
Our limited assurance procedures consisted of making en uiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other limited assurance procedures. A limited assurance engagement is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and conse uently does not enable us to obtain reasonable assurance that we would become aware of all significant matters that might be identified in a reasonable assurance engagement. Accordingly, we do not express an audit opinion.
Our engagement did not involve updating or re-issuing any previously issued audit or limited assurance reports on any financial information used as a source of the Financial Information.
oncl sions Historical Financial Information Based on our limited assurance engagement, which is not an audit, nothing has come to our attention that causes us to believe that the Historical Financial Information of OneMarket comprising:
historical statements of profit and loss for F 15, F 1 and F 17 as set out in table 5.3.1 of Section 5.3(a) of the Demerger Booklet historical cash flows for F 15, F 1 and F 17 as set out in table 5.3.2 of Section 5.3(b) of the Demerger Booklet and historical statement of financial position as at 31 December 2017 as set out in table 5.3.3 of Section 5.3(c) of the Demerger Booklet, is not presented fairly, in all material respects, in accordance with the stated basis of preparation, as described in Section 5.2 of the Demerger Booklet.
Pro Forma Historical Statement of Financial Position Based on our limited assurance engagement, which is not an audit, nothing has come to our attention that causes us to believe that the Pro Forma Historical Statement of Financial Position of OneMarket Group as at 31 December 2017, as set out in table 5.3.3 of section 5.3(c) of the Demerger Booklet, is not presented fairly, in all material respects, in accordance with the stated basis of preparation, as described in Section 5.2 of the Demerger Booklet.
A member firm of Ernst & Young Global Limited Ernst & Young Transaction Advisory Services Limited, ABN 87 003 599 844 Australian Financial Services Licence No. 240585
WESTFIELD CORPORATION PROPOSAL // PAGE 145 ANNEXURE B INDEPENDENT LIMITED ASSURANCE REPORT
Ernst & Young Transaction Advisory Te l : +61 2 9248 5555 Services Limited Fax: +61 2 9248 5959 200 George Street ey.com/au Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001
Restriction on se Without modifying our conclusions, we draw attention to Section 5.2 of the Demerger Booklet, which describes the purpose of the Financial Information. As a result, the Financial Information may not be suitable for use for another purpose.
onsent rnst oung ransaction Advisory Services has consented to the inclusion of this limited assurance report in the Demerger Booklet in the form and conte t in which it is included.
n epen ence or Disclos re o nterest rnst oung ransaction Advisory Services does not have any interests in the outcome of this ransaction other than in the preparation of this report for which normal professional fees will be received.
ours faithfully
avin Sultana Director and Representative rnst oung ransaction Advisory Services imited
A member firm of Ernst & Young Global Limited Ernst & Young Transaction Advisory Services Limited, ABN 87 003 599 844 Australian Financial Services Licence No. 240585
PAGE 146 // WESTFIELD CORPORATION PROPOSAL Ernst & Young Transaction Advisory Te l : +61 2 9248 5555 Services Limited Fax: +61 2 9248 5959 200 George Street ey.com/au Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001
April 2
R D R R D D D R R R
R – R D
rnst o n r ns ction isory er ices
Ernst & Young Transaction Advisory Services Limited (“Ernst & Young Transaction Advisory Services” or “we,” or “us” or “our”) has been engaged to provide general financial product advice in the form of an Independent Limited Assurance Report (“Report”) in connection with a financial product of another person. he Report is to be included in documentation being sent to you by that person.
in nci l er ices i e
This Financial Services Guide (“FSG”) provides important information to help retail clients make a decision as to their use of the general financial product advice in a Report, information about us, the financial services we offer, our dispute resolution process and how we are remunerated.
in nci l ser ices e o er
We hold an Australian Financial Services icence which authorises us to provide the following services
financial product advice in relation to securities, derivatives, general insurance, life insurance, managed investments, superannuation, and government debentures, stocks and bonds and
arranging to deal in securities.
ener l in nci l pro ct ice
In our Report we provide general financial product advice. he advice in a Report does not take into account your personal ob ectives, financial situation or needs.
ou should consider the appropriateness of a Report having regard to your own ob ectives, financial situation and needs before you act on the advice in a Report. Where the advice relates to the ac uisition or possible ac uisition of a financial product, you should also obtain an offer document relating to the financial product and consider that document before making any decision about whether to ac uire the financial product.
We have been engaged to issue a Report in connection with a financial product of another person. ur Report will include a description of the circumstances of our engagement and identify the person who has engaged us. Although you have not engaged us directly, a copy of the Report will be provided to you as a retail client because of your connection to the matters on which we have been engaged to report.
A member firm of Ernst & Young Global Limited Ernst & Young Transaction Advisory Services Limited, ABN 87 003 599 844 Australian Financial Services Licence No. 240585
WESTFIELD CORPORATION PROPOSAL // PAGE 147 ANNEXURE B INDEPENDENT LIMITED ASSURANCE REPORT
Ernst & Young Transaction Advisory Te l : +61 2 9248 5555 Services Limited Fax: +61 2 9248 5959 200 George Street ey.com/au Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001
e charge fees for providing Reports These fees have een agreed with, and will e paid y, the person who engaged us to provide a Report ur fees for Reports are ased on a time cost or fi ed fee asis ur directors and employees providing financial services receive an annual salary, a performance onus or profit share depending on their level of seniority The estimated fee for this Report is , (inclusive of GST)
Ernst & Young Transaction Advisory Services is ultimately owned y Ernst & Young, which is a professional advisory and accounting practice Ernst & Young may provide professional services, including audit, ta and financial advisory services, to the person who engaged us and receive fees for those services
E cept for the fees and enefits disclosed in this emerger Scheme ooklet in section , Ernst & Young Transaction Advisory Services, including any of its directors, employees or associated entities should not receive any fees or other enefits, directly or indirectly, for or in connection with the provision of a Report
Ernst & Young Transaction Advisory Services and any of its associated entities may at any time provide professional services to financial product issuers in the ordinary course of usiness
The lia ility of Ernst & Young Transaction Advisory Services is limited to the contents of this Financial Services Guide and the Report
As the holder of an Australian Financial Services Licence, we are re uired to have a system for handling complaints from persons to whom we provide financial services All complaints must e in writing and addressed to the AFS ompliance anager or the hief omplaints fficer and sent to the address elow e will make every effort to resolve a complaint within days of receiving the complaint If the complaint has not een satisfactorily dealt with, the complaint can e referred to the Financial m udsman Service Limited
A member firm of Ernst & Young Global Limited Ernst & Young Transaction Advisory Services Limited, ABN 87 003 599 844 Australian Financial Services Licence No. 240585
PAGE 148 // WESTFIELD CORPORATION PROPOSAL Ernst & Young Transaction Advisory Te l : +61 2 9248 5555 Services Limited Fax: +61 2 9248 5959 200 George Street ey.com/au Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001
The ompany and its related entities hold rofessional Indemnity insurance for the purpose of compensation should this become relevant. Representatives who have left the Company’s employment are covered y our insurances in respect of events occurring during their employment These arrangements and the level of cover held y the ompany satisfy the re uirements of section of the orporations Act
Financial m udsman Service Limited AFS ompliance anager o Ernst & Young el ourne I Telephone George Street
Sydney S
Telephone ( )
This Financial Services Guide has een issued in accordance with ASI lass rder
A member firm of Ernst & Young Global Limited Ernst & Young Transaction Advisory Services Limited, ABN 87 003 599 844 Australian Financial Services Licence No. 240585
WESTFIELD CORPORATION PROPOSAL // PAGE 149 ANNEXURE C NOTICE OF DEMERGER SCHEME MEETING
PAGE 150 // WESTFIELD CORPORATION PROPOSAL Westfield Corporation Limited ABN 12 166 995 197 (Westfield Corporation)
Notice of Demerger Scheme Meeting
Notice is hereby given that by an order of the Supreme Court of Australia made on 12 April 2018 pursuant to section 411(1) of the Corporations Act 2001 (Cth) (Corporations Act) a meeting of Westfield Shareholders will be held at 11.00am (Sydney time) (or as soon thereafter as the Unibail-Rodamco Transaction Meetings conclude) on 24 May 2018 at Centennial Hall, Sydney Town Hall, 483 George St, Sydney. Business of the Meeting To consider and, if thought fit, to pass the following resolution in accordance with section 411(4)(a)(ii) of the Corporations Act: “That, in accordance with the provisions of section 411 of the Corporations Act 2001 (Cth): (a) the arrangement proposed between Westfield Corporation and Westfield Shareholders, as contained in and more particularly described in the Demerger Booklet accompanying the notice convening this meeting, is agreed to; and (b) the directors of Westfield Corporation are authorised to agree to such alterations or conditions as are thought fit by the Scheme Court and, subject to approval of the scheme by the Scheme Court, the board of directors of Westfield Corporation is authorised to implement the Demerger Scheme with any such modifications or conditions” By order of the Scheme Court
Simon Tuxen Company Secretary
WESTFIELD CORPORATION PROPOSAL // PAGE 151 ANNEXURE C NOTICE OF DEMERGER SCHEME MEETING
Explanatory Notes: These notes should be read in conjunction with this Notice of Demerger Scheme Meeting. Terminology Capitalised terms which are defined in section 9 of the Demerger Booklet which accompanies this Notice of Demerger Scheme Meeting have the same meaning when used in this notice (including these notes) unless the context requires otherwise. Chairperson The Scheme Court has directed that Sir Frank Lowy act as Chairperson of the Demerger Scheme Meeting or, failing them, Brian Schwartz. Majority required In accordance with section 411(4)(a)(ii) of the Corporations Act, the resolution contained in this Notice of Demerger Scheme Meeting must be passed by: (a) a majority in number of those Westfield Shareholders present and voting at the Demerger Scheme Meeting (either in person, by proxy or (in the case of corporate Westfield Shareholders), by a corporate representative); and (b) at least 75% of the votes cast on the resolution contained in this Notice of Demerger Scheme Meeting. The vote will be conducted by poll. Entitlement to vote The Scheme Court has ordered that, for the purposes of the Demerger Scheme Meeting, Westfield Shares will be taken to be held by the persons who are registered as Westfield Shareholders at 7.00pm (Sydney time) on 22 May 2018. Accordingly, registrable transmission applications or transfers registered after this time will be disregarded in determining entitlements to vote at the Demerger Scheme Meeting. Voting in person To vote in person at the Demerger Scheme Meeting, you must attend the Demerger Scheme Meeting to be held at 11.00am (or as soon thereafter as the Unibail-Rodamco Transaction Meetings conclude) on 24 May 2018 at Centennial Hall, Sydney Town Hall, 483 George St, Sydney. You will be admitted to the Demerger Scheme Meeting and given a voting card upon disclosure at the point of entry of your name and address. Voting by proxy If you are eligible to vote and do not plan to attend the Demerger Scheme Meeting in person, you are encouraged to complete and return the red personalised proxy form which accompanies this Notice of Demerger Scheme Meeting. Proxy appointment (a) A member of Westfield Corporation entitled to attend and vote may appoint a proxy to attend and vote for the member at the Scheme Meeting. (b) If a member of Westfield Corporation is entitled to two or more votes, they may appoint two proxies and each proxy must be appointed to represent a specified proportion of the member’s voting rights. If you appoint two proxies and do not specify the proportion of the number of votes each proxy may exercise, each of the proxies may exercise half of your votes. If you wish to appoint a second proxy, write on your red proxy form the names of both proxies and the proportion of votes allocated to each in accordance with the instructions on your red proxy form. (c) A proxy can be an individual or a body corporate and need not be a member of Westfield Corporation. (d) If you appoint a body corporate as a proxy, that body corporate will need to ensure that it appoints an individual as its corporate representative to exercise its powers at the meeting and provide satisfactory evidence of the appointment of its corporate representative prior to the commencement of the meeting. (e) A corporate securityholder must sign the red proxy form in accordance with the Corporations Act or otherwise in accordance with the instructions set out in the red proxy form. Where the red proxy form is signed by a duly authorised person or persons of a corporate securityholder, such authorisation must have been sighted by the Westfield Registry. (f) At least 48 hours before the meeting, Westfield Corporation must receive: —— the proxy’s appointment; and —— any authority under which the appointment was signed or a certified copy of the authority (unless you have already provided a copy of the authority to Westfield Corporation).
PAGE 152 // WESTFIELD CORPORATION PROPOSAL (g) The proxy appointment and any authority appointing an attorney must be: —— by lodging a proxy online at http://www.investorvote.com.au; —— by mailing the enclosed red proxy form to Computershare Investor Services Pty Limited, GPO Box 1282 Melbourne, Victoria 3001 Australia using the reply paid envelope provided; —— by mobile, by scanning the QR code on the enclosed red proxy form and following the prompts; —— for custodians, by visiting http://www.intermediaryonline.com to submit your voting intentions (for Intermediary Online subscribers only); —— by hand delivering the enclosed red proxy form to the Westfield Registry at Level 4, 60 Carrington Street, Sydney NSW 2000 Australia; or —— by faxing the enclosed red proxy form to the Westfield Registry on 1800 783 447 (within Australia) or +61 3 9473 2555 (outside Australia). Jointly held securities If the Westfield Shares are jointly held, only one of the joint Westfield Shareholders is entitled to vote. If more than one joint Westfield Shareholder votes, only the vote of the Westfield Shareholder whose name appears first in the Register will be counted. Voting by attorney A Westfield Shareholder entitled to attend and vote at the Demerger Scheme Meeting may appoint an attorney to vote at the Demerger Scheme Meeting. Powers of attorney must be received by the Westfield Registry by no later than 11.00am (Sydney time) on 22 May 2018. Persons who are attending as an attorney should bring the original or a certified copy of the power of attorney to the Demerger Scheme Meeting. Voting by corporate representative To vote at the Demerger Scheme Meeting a corporation who is a Westfield Shareholder, or who has been appointed as a proxy by a Westfield Shareholder, may appoint a person to act as its representative. Persons who are attending as a corporate representative for a corporation must bring evidence of their appointment. The appointment must comply with section 250D of the Corporations Act. An authorised corporate representative will be admitted to the Demerger Scheme Meeting and given a voting card upon providing, at the point of entry to the Demerger Scheme Meeting, written evidence of their appointment including any authority under which it is signed, their name and address and the identity of their appointer. Scheme Court approval If the resolution contained in this Notice of Demerger Scheme Meeting is approved at the Demerger Scheme Meeting by the Requisite Majority, the implementation of the Demerger Scheme (with or without modification) will be subject to, among other things, the subsequent approval of the Scheme Court.
WESTFIELD CORPORATION PROPOSAL // PAGE 153 ANNEXURE D NOTICE OF GENERAL MEETING
PAGE 154 // WESTFIELD CORPORATION PROPOSAL Westfield Corporation Limited ABN 12 166 995 197 (Westfield Corporation)
Notice of General Meeting
Notice is hereby given that a general meeting of Westfield Shareholders will be held at 11.00am (Sydney time) (or as soon thereafter as the Unibail-Rodamco Transaction Meetings conclude) on 24 May 2018 at Centennial Hall, Sydney Town Hall, 483 George St, Sydney. Business of the Meeting To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That, subject to and conditional on the scheme of arrangement set out in Annexure E of the Demerger Booklet of which the notice convening this meeting forms part (Demerger Scheme) becoming Effective in accordance with section 411(10) of the Corporations Act and for the purpose of section 256C(1) of the Corporations Act and for all other purposes, Westfield Corporation’s share capital be reduced on the Demerger Implementation Date by the Capital Reduction Aggregate Amount (as defined in the Demerger Scheme), with the reduction to be effected and satisfied by applying the Capital Reduction Aggregate Amount equally against each Westfield Share on issue on the Demerger Record Date (rounded to the nearest Australian cent) in accordance with the Demerger Scheme.” By order of the Westfield Board
Simon Tuxen Company Secretary
WESTFIELD CORPORATION PROPOSAL // PAGE 155 ANNEXURE D NOTICE OF GENERAL MEETING
Explanatory Notes: These notes should be read in conjunction with this Notice of General Meeting. Terminology Capitalised terms which are defined in section 9 of the Demerger Booklet which accompanies this Notice of General Meeting have the same meaning when used in this notice (including these notes) unless the context requires otherwise. Majority required For the Capital Reduction Resolution to be passed it must be approved by a simple majority of the votes cast on the ordinary resolution. The vote will be conducted by poll. Entitlement to vote For the purposes of the General Meeting, Westfield Shares will be taken to be held by the persons who are registered as Westfield Shareholders at 7.00pm on 22 May 2018. Accordingly, registrable transmission applications or transfers registered after this time will be disregarded in determining entitlements to vote at the General Meeting. Voting in person To vote in person at the General Meeting, you must attend the General Meeting to be held at 11.00am (or as soon thereafter as the Unibail-Rodamco Transaction Meetings conclude) on 24 May 2018 at Centennial Hall, Sydney Town Hall, 483 George St, Sydney. You will be admitted to the General Meeting and given a voting card upon disclosure at the point of entry of your name and address. Voting by proxy If you are eligible to vote and do not plan to attend the General Meeting in person, you are encouraged to complete and return the blue personalised proxy form which accompanies this Notice of General Meeting. Proxy appointment (a) A member of Westfield Corporation entitled to attend and vote may appoint a proxy to attend and vote for the member at the General Meeting. (b) If a member of Westfield Corporation is entitled to two or more votes, they may appoint two proxies and each proxy must be appointed to represent a specified proportion of the member’s voting rights. If you appoint two proxies and do not specify the proportion of the number of votes each proxy may exercise, each of the proxies may exercise half of your votes. If you wish to appoint a second proxy, write on your blue proxy form the names of both proxies and the proportion of votes allocated to each in accordance with the instructions on your blue proxy form. (c) A proxy can be an individual or a body corporate and need not be a member of Westfield Corporation. (d) If you appoint a body corporate as a proxy, that body corporate will need to ensure that it appoints an individual as its corporate representative to exercise its powers at the meeting and provide satisfactory evidence of the appointment of its corporate representative prior to the commencement of the meeting. (e) A corporate securityholder must sign the blue proxy form in accordance with the Corporations Act or otherwise in accordance with the instructions set out in the blue proxy form. Where the blue proxy form is signed by a duly authorised person or persons of a corporate securityholder, such authorisation must have been sighted by the Westfield Registry. (f) At least 48 hours before the meeting, Westfield Corporation must receive: —— the proxy’s appointment; and —— any authority under which the appointment was signed or a certified copy of the authority (unless you have already provided a copy of the authority to Westfield Corporation).
PAGE 156 // WESTFIELD CORPORATION PROPOSAL (g) The proxy appointment and any authority appointing an attorney must be: —— by lodging a proxy online at http://www.investorvote.com.au; —— by mailing the enclosed blue proxy form to Computershare Investor Services Pty Limited, GPO Box 1282 Melbourne, Victoria 3001 Australia using the reply paid envelope provided; —— by mobile, by scanning the QR code on the enclosed red proxy form and following the prompts; —— for custodians, by visiting http://www.intermediaryonline.com to submit your voting intentions (for Intermediary Online subscribers only); —— by hand delivering the enclosed blue proxy form to the Westfield Registry at Level 4, 60 Carrington Street, Sydney NSW 2000 Australia; or —— by faxing the enclosed blue proxy form to the Westfield Registry on 1800 783 447 (within Australia) or +61 3 9473 2555 (outside Australia). Jointly held securities If the Westfield Shares are jointly held, only one of the joint Westfield Shareholders is entitled to vote. If more than one joint Westfield Shareholder votes, only the vote of the Westfield Shareholder whose name appears first in the Register will be counted. Voting by attorney A Westfield Shareholder entitled to attend and vote at the General Meeting may appoint an attorney to vote at the General Meeting. Powers of attorney must be received by the Westfield Registry by no later than 11.00am (Sydney time) on 22 May 2018. Persons who are attending as an attorney should bring the original or a certified copy of the power of attorney to the General Meeting. Voting by corporate representative To vote at the General Meeting a corporation who is a Westfield Shareholder, or who has been appointed as a proxy by a Westfield Shareholder, may appoint a person to act as its representative. Persons who are attending as a corporate representative for a corporation must bring evidence of their appointment. The appointment must comply with section 250D of the Corporations Act. An authorised corporate representative will be admitted to the General Meeting and given a voting card upon providing, at the point of entry to the General Meeting, written evidence of their appointment including any authority under which it is signed, their name and address and the identity of their appointer.
WESTFIELD CORPORATION PROPOSAL // PAGE 157 ANNEXURE E DEMERGER SCHEME OF ARRANGEMENT
PAGE 158 // WESTFIELD CORPORATION PROPOSAL
Scheme of Arrangement
Westfield Corporation Limited ABN 12 166 995 197 (Westfield Corporation)
Demerger Participants
King & Wood Mallesons Level 30 QV1 Building 250 St Georges Terrace Perth WA 6000 Australia T +61 8 9269 7000 F +61 8 9269 7999 DX 210 Perth www.kwm.com CES:NRH: 602-0028920
WESTFIELD CORPORATION PROPOSAL // PAGE 159 ANNEXURE E DEMERGER SCHEME OF ARRANGEMENT
Scheme of Arrangement Details
Parties Westfield Corporation and Demerger Participants
Westfield Name Westfield Corporation Limited (ABN 12 166 Corporation 995 197)
Address Level 29, 85 Castlereagh Street, Sydney NSW 2000, Australia
Email [email protected]
Attention Simon Tuxen
Demerger Each person registered as a holder of a fully paid ordinary share Participants in Westfield Corporation as at the Demerger Record Date.
Governing law New South Wales
© King & Wood Mallesons Scheme of Arrangement 1 35006753
PAGE 160 // WESTFIELD CORPORATION PROPOSAL
General terms
1 Definitions and interpretation 1.1 Definitions Unless the contrary intention appears, these meanings apply:
ASIC means the Australian Securities and Investments Commission.
ASX means ASX Limited ABN 98 008 624 691 or the market operated by it as the context requires.
ASX Listing means admission of OneMarket Limited to the official list of ASX and for official quotation of the OneMarket Shares on ASX.
ASX Operating Rules means the market operating rules of ASX as amended, varied or waived from time to time.
ASX Settlement means ASX Settlement Pty Limited ABN 49 008 504 532 as the holder of a licence to operate a clearing and settlement facility.
Business Day means a business day as defined in the Listing Rules of the ASX and on which trading will take place on Euronext Paris and Euronext Amsterdam and the New York Stock Exchange.
Capital Reduction means the reduction in the capital of Westfield Corporation by the Capital Reduction Aggregate Amount to be applied equally against each Westfield Share on issue as at the Demerger Record Date in accordance with the terms of the Capital Reduction Resolution.
Capital Reduction Aggregate Amount means the amount of the OneMarket Market Value less the Demerger Dividend Aggregate Amount.
Capital Reduction Entitlement means, in relation to a Demerger Participant, the Capital Reduction Pro-Rata Amount multiplied by the number of Westfield Shares held by the Demerger Participant on the Demerger Record Date (rounded to the nearest Australian cent).
Capital Reduction Pro-Rata Amount means the Capital Reduction Aggregate Amount divided by the number of Westfield Shares on issue on the Demerger Record Date.
Capital Reduction Resolution means the ordinary resolution concerning the Capital Reduction to be considered by Westfield Shareholders at the General Meeting in the form set out in the notice of general meeting contained in Annexure D of the Demerger Booklet.
CHESS means the clearing house electronic sub register system of share transfers operated by ASX Settlement and Transfer Corporation Pty Ltd.
Corporations Act means the Corporations Act 2001 (Cth).
Deed Poll means the deed poll dated 6 April 2018 executed by OneMarket Limited under which OneMarket Limited covenants in favour of each Demerger Participant to perform its obligations under this Demerger Scheme.
© King & Wood Mallesons Scheme of Arrangement 2 35006753
WESTFIELD CORPORATION PROPOSAL // PAGE 161 ANNEXURE E DEMERGER SCHEME OF ARRANGEMENT
Demerger means the proposed demerger of OneMarket Limited from Westfield Corporation through the implementation of the Demerger Scheme, the payment of the Demerger Dividend and the Capital Reduction.
Demerger Dividend means the special dividend for an amount, per Westfield Share, which is equal to the Demerger Dividend Aggregate Amount divided by the number of Westfield Shares on issue on the Demerger Record Date (rounded to the nearest Australian cent).
Demerger Dividend Aggregate Amount means the amount that is the lower of:
(a) AU$150,000,000; and
(b) the OneMarket Market Value.
Demerger Dividend Entitlement in relation to each Demerger Participant, means the Demerger Dividend Aggregate Amount, divided by the number of Westfield Shares on issue on the Demerger Record Date, then multiplied by the number of Westfield Shares held by the Demerger Participant on the Demerger Record Date.
Demerger Dividend Resolution means a resolution of the Westfield Board to approve the determination and payment of the Demerger Dividend.
Demerger Implementation Deed means the implementation deed dated 6 April 2018 between Westfield Corporation and OneMarket Limited under which, amongst other things, Westfield Corporation has agreed to propose this Demerger Scheme to the Westfield Shareholders, and each of Westfield Corporation and OneMarket Limited has agreed to take certain steps to give effect to this Demerger Scheme.
Demerger Participant has the meaning given in the Details.
Demerger Record Date means 5:00pm on the second Business Day following the Effective Date or such other date as Westfield Corporation and OneMarket Limited may agree in writing.
Demerger Scheme means this scheme of arrangement under Part 5.1 of the Corporations Act between Westfield Corporation and Demerger Participants, subject to any alterations or conditions made or required by the Scheme Court pursuant to section 411(6) of the Corporations Act.
Demerger Booklet means the Demerger Scheme Booklet published by Westfield Corporation and dated on or around 12 April 2018.
Demerger Scheme Meeting means the meeting of Westfield Shareholders, ordered by the Scheme Court to be convened pursuant to section 411(1) of the Corporations Act at which Westfield Shareholders will vote on this Demerger Scheme.
Demerger Sale Facility Election means a valid election not to receive OneMarket Shares and to participate in the Sale Facility made by a Small Shareholder under clause 5.5.
Demerger Sale Facility Election Form means the form specified by Westfield Corporation to be completed by Small Shareholders who wish to participate in the Sale Facility.
Details means the section of this document headed “Details”.
© King & Wood Mallesons Scheme of Arrangement 3 35006753
PAGE 162 // WESTFIELD CORPORATION PROPOSAL
Distribution in relation to a Demerger Participant, means the aggregate of that Demerger Participant’s Demerger Dividend Entitlement and Capital Reduction Entitlement.
Effective means the coming into effect, pursuant to section 411(10) of the Corporations Act, of the order of the Scheme Court made under section 411(4)(b) of the Corporations Act in relation to this Demerger Scheme, but in any event at no time before an office copy of the order of the Scheme Court is lodged with ASIC.
Effective Date means the date on which this Demerger Scheme becomes Effective.
Election Time means 5.00 pm on the Effective Date or any other date agreed between Westfield Corporation and OneMarket Limited.
Election Withdrawal Form means the form specified by Westfield Corporation that may be completed by Small Shareholders to withdraw their Demerger Sale Facility Election.
End Date means 30 September 2018 or such other date as is agreed in writing by Westfield Corporation and OneMarket Limited.
General Meeting means the general meeting of Westfield Shareholders convened to consider the Capital Reduction Resolution.
Implementation Date means the fifth Business Day following the Demerger Record Date or such other date as determined by the Westfield Board.
Ineligible Foreign Holder means a Demerger Participant whose address in the Westfield Register on the Demerger Record Date is in a jurisdiction other than Australia or its external territories or New Zealand, unless Westfield Corporation otherwise determines that it is lawful and not unduly onerous or impracticable to transfer OneMarket Shares to a Westfield Shareholder pursuant to the terms of the Demerger Scheme.
Licensed Market means a financial market the operation of which is authorised by an Australian market licence under section 795B of the Corporations Act.
Listing Rules means the official listing rules of ASX from time to time as modified by any express written waiver or exemption given by ASX.
Net Sale Proceeds has the meaning given in clause 5.13(b)(ii).
OneMarket Limited means OneMarket Limited ACN 623 247 549.
OneMarket Constitution means the constitution of OneMarket Limited from time to time.
OneMarket Market Value means the number of OneMarket Shares on issue immediately following the Demerger multiplied by the OneMarket VWAP.
OneMarket Register means the register of members of OneMarket Limited.
OneMarket Share means a fully paid ordinary share in OneMarket Limited.
OneMarket Shareholder means a person who is registered in the OneMarket Register as a holder of a OneMarket Share following implementation of the Demerger.
© King & Wood Mallesons Scheme of Arrangement 4 35006753
WESTFIELD CORPORATION PROPOSAL // PAGE 163 ANNEXURE E DEMERGER SCHEME OF ARRANGEMENT
OneMarket VWAP means the VWAP of OneMarket Shares for the first ten Business Days starting from the date of the commencement of trading of OneMarket Shares on ASX (including on a deferred settlement basis).
Registered Address means, in relation to a Westfield Shareholder, the address shown in the Westfield Register.
Regulatory Approvals means such approvals, consents, waivers or other acts from or by Regulatory Authorities as are necessary or, in the reasonable opinion of Westfield Corporation, desirable in connection with or to implement the Demerger.
Regulatory Authority includes:
(a) ASX;
(b) ASIC;
(c) Australian Taxation Office;
(d) a government or governmental, semi-governmental or judicial entity or authority;
(e) a minister, department, office, commission, delegate, instrumentality, agency, board, authority or organisation of any government; and
(f) any regulatory organisation established under statute.
Sale Agent means an entity appointed by Westfield Corporation to sell the Sale Securities pursuant to clause 5.13.
Sale Facility means the facility provided for in clause 5.13 of this Demerger Scheme.
Sale Securities has the meaning given in clause 5.13(a).
Scheme Court means the Supreme Court of New South Wales, or such other court as is agreed in writing by Westfield Corporation and OneMarket Limited.
Second Court Date means the day on which the Scheme Court:
(a) makes an order pursuant to section 411(4)(b) of the Corporations Act approving this Demerger Scheme; or
(b) declines to approve the Demerger Scheme.
Selling Shareholder means a Demerger Participant in respect of whom OneMarket Shares are transferred to the Sale Agent under this Demerger Scheme being:
(a) all Selling Small Shareholders; and
(b) all Ineligible Foreign Holders.
Selling Small Shareholder means a Small Shareholder who has made a valid Demerger Sale Facility Election pursuant to clause 5.5.
Settlement Operating Rules means the operating rules of ASX Settlement.
© King & Wood Mallesons Scheme of Arrangement 5 35006753
PAGE 164 // WESTFIELD CORPORATION PROPOSAL
Small Shareholder means a Demerger Participant who is entitled to receive OneMarket Shares under this Demerger Scheme who individually holds 10,000 Westfield Shares or fewer as at the Demerger Record Date. Unibail-Rodamco Schemes means the scheme of arrangement under Part 5.1 of the Corporations Act pursuant to which all Westfield Shares will be transferred to Unibail-Rodamco SE as contemplated by the Implementation Agreement dated 12 December 2017 between Westfield and Unibail-Rodamco SE.
VWAP means the volume weighted average price of the relevant shares traded on ASX during the relevant period but does not include any trades which Westfield Corporation determines to be outside the ordinary course of trading, which may include any “Crossing” transacted outside the “Open Session State” or any “Special Crossing” transacted at any time, each as defined in the ASX Operating Rules, or any overseas trades or trades pursuant to the exercise of options over such shares.
Westfield means each of Westfield and Westfield America Management Limited ABN 66 072 780 619 as responsible entity of Westfield America Trust ABN 27 374 714 905 and as responsible entity of WFD Trust ABN 50 598 857 938.
Westfield Board means the board of directors of Westfield Corporation from time to time.
Westfield Constitution means the constitution of Westfield Corporation.
Westfield Register means the register of members of Westfield Corporation maintained by or on behalf of Westfield Corporation in accordance with section 168(1) of the Corporations Act.
Westfield Share means a fully paid ordinary share in the capital of Westfield Corporation.
Westfield Shareholder means each person registered in the Westfield Register as a holder of one or more Westfield Shares.
Westfield Share Registry means Computershare Investor Services Pty Limited ACN 078 279 277 or such other entity which provides securities registry services to Westfield Corporation from time to time.
1.2 General interpretation Headings and labels used for definitions are for convenience only and do not affect interpretation. Unless the contrary intention appears, in this document:
(a) the singular includes the plural and vice versa;
(b) a reference to a document includes any agreement or other legally enforceable arrangement created by it (whether the document is in the form of an agreement, deed or otherwise);
(c) a reference to a document also includes any variation, replacement or novation of it;
(d) the meaning of general words is not limited by specific examples introduced by “including”, “for example”, “such as” or similar expressions;
(e) a reference to “person” includes an individual, a body corporate, a partnership, a joint venture, an unincorporated association and an authority or any other entity or organisation;
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(f) a reference to a particular person includes the person’s executors, administrators, successors, substitutes (including persons taking by novation) and assigns;
(g) a reference to a time of day is a reference to Sydney time;
(h) a reference to A$ or Australian dollars is a reference to the currency of Australia;
(i) a reference to any legislation includes regulations under it and any consolidations, amendments, re-enactments or replacements of any of them;
(j) a reference to a group of persons is a reference to any 2 or more of them jointly and to each of them individually;
(k) a reference to any thing (including an amount) is a reference to the whole and each part of it;
(l) a period of time starting from a given day or the day of an act or event, is to be calculated exclusive of that day;
(m) if a party must do something under this document on or by a given day and it is done after 5.00pm on that day, it is taken to be done on the next day; and
(n) if the day on which a party must do something under this document is not a Business Day, the party must do it on the next Business Day.
2 Preliminary Westfield Corporation is:
(a) a public company limited by shares;
(b) incorporated in Australia and registered in Victoria; and
(c) admitted to the official list of the ASX.
2.1 Demerger Implementation Deed Westfield Corporation and OneMarket Limited have agreed by executing the Demerger Implementation Deed to implement the terms of this Demerger Scheme.
2.2 Deed Poll OneMarket Limited has executed the Deed Poll for the purpose of covenanting in favour of the Demerger Participants to perform (or procure the performance of) its obligations contemplated by this Demerger Scheme.
3 Conditions Precedent 3.1 Conditions precedent to Demerger Scheme This Demerger Scheme is conditional on, and will have no force or effect until, the satisfaction of each of the following conditions precedent:
(a) ASX approving the admission of OneMarket Limited to the official list of ASX and the official quotation of the OneMarket Shares on ASX, subject
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only to this Demerger Scheme taking effect and such other conditions as may be acceptable to the Westfield Board;
(b) Westfield Shareholders passing the following resolutions put to them by the required majorities:
(i) the resolution to approve the Demerger Scheme at the Demerger Scheme Meeting; and
(ii) the Capital Reduction Resolution at the General Meeting;
(c) as at 8.00am on the Second Court Date, each of the Demerger Implementation Deed and Deed Poll not having been terminated;
(d) the Scheme Court having approved this Demerger Scheme, with or without any alteration or condition, pursuant to section 411(4)(b) of the Corporations Act, and if applicable, Westfield Corporation and OneMarket Limited having accepted in writing any alteration or condition made or required by the Scheme Court under section 411(6) of the Corporations Act;
(e) the coming into effect, pursuant to section 411(10) of the Corporations Act, of the orders of the Scheme Court made under section 411(4)(b) of the Corporations Act (and, if applicable, section 411(6) of the Corporations Act) in relation to this Demerger Scheme; and
(f) each of the conditions precedent specified in clause 3.1 of the Unibail- Rodamco Scheme have been satisfied.
3.2 Conditions precedent and operation of clause 5 The satisfaction of each condition of clause 3.1 of this Demerger Scheme is a condition precedent to the operation of clause 5 of this Demerger Scheme.
4 Demerger Scheme 4.1 Effective Date Subject to clause 4.2, this Demerger Scheme will come into effect on and from the Effective Date.
4.2 End Date This Demerger Scheme will lapse and be of no further force or effect if:
(a) the Effective Date does not occur on or before the End Date; or
(b) the Demerger Implementation Deed or Deed Poll is terminated in accordance with its terms.
5 Implementation of Demerger Scheme 5.1 Lodgement of Scheme Court orders with ASIC If the conditions precedent set out in clause 3.1 of this Demerger Scheme (other than the condition precedent in clause 3.1(e) of this Demerger Scheme) are satisfied, Westfield Corporation must lodge with ASIC in accordance with section 411(10) of the Corporations Act an office copy of the Scheme Court order approving this Demerger Scheme as soon as possible, and in any event by no later than 5.00pm on the first Business Day after the day on which the Scheme
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Court approves this Demerger Scheme or such later time as Westfield Corporation and OneMarket Limited agree in writing.
5.2 Demerger Dividend Resolution Prior to the Implementation Date, the Westfield Board will pass the Demerger Dividend Resolution.
5.3 Subdivision of OneMarket Shares On the Implementation Date, immediately before implementation of the steps provided for in clause 5.4 and clause 5.6, Westfield Corporation will procure (as sole shareholder of OneMarket Limited) that OneMarket Limited’s share capital is subdivided so that the number of OneMarket Shares on issue is equal to the number of OneMarket Shares required to be transferred to Demerger Participants and Selling Shareholder pursuant to clause 5.6. 5.4 Implementation of the Capital Reduction, Demerger Dividend and Demerger Scheme On the Implementation Date, without the need for any further act by any Demerger Participant:
(a) Westfield Corporation will declare and pay the Demerger Dividend;
(b) Westfield Corporation will reduce its share capital by the Capital Reduction Aggregate Amount (if any) in accordance with the Capital Reduction Resolution; and
(c) Westfield Corporation must apply the Distribution (comprising the Demerger Dividend Entitlement and the Capital Reduction Entitlement (if any)) of each Demerger Participant in accordance with clause 5.6.
5.5 Sale Facility Election (a) A Demerger Participant who is a Small Shareholder may make a Demerger Sale Facility Election not to receive OneMarket Shares and to participate in the Sale Facility by completing a Demerger Sale Facility Election Form and returning it to the address specified in the Demerger Sale Facility Election Form so that it is received by the Westfield Share Registry (and not withdrawn) by no later than the Election Time.
(b) A Small Shareholder may withdraw their Demerger Sale Facility Election under clause 5.5(a) by lodging an Election Withdrawal Form provided that it is received by the Westfield Share Registry by no later than the Election Time.
(c) A Demerger Sale Facility Election made under clause 5.5(a) may only be made in respect of all and not part of the Westfield Shares held by the relevant Small Shareholder.
5.6 Entitlements of Demerger Participants The Distribution of each Demerger Participant, will, on the Implementation Date, be applied (without the need for any further act by a Demerger Participant) as follows:
(a) for each Demerger Participant, other than a Selling Shareholder, by Westfield Corporation as consideration in full for the transfer by Westfield Corporation to that Demerger Participant of that number of OneMarket Shares which is equal to the number of Westfield Shares held by that
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Demerger Participant on the Demerger Record Date divided by 20 (rounded up to the nearest whole number); and
(b) for each Selling Shareholder, by Westfield Corporation as consideration in full for the transfer by Westfield Corporation to the Sale Agent of that number of OneMarket Shares which is equal to the number of Westfield Shares held by that Selling Shareholder on the Demerger Record Date divided by 20 (rounded up to the nearest whole number).
5.7 Transfer of OneMarket Shares The obligations of Westfield Corporation under clause 5.6 will be discharged by WCL procuring:
(a) the execution of a transfer or transfers of all of the OneMarket Shares to the Demerger Participants (or in the case of Selling Shareholder, to the Sale Agent) in the numbers determined in accordance with clause 5.6; and
(b) the entry in the OneMarket Register of the name of each Demerger Participant (or in the case of Selling Shareholder, the Sale Agent) in respect of the OneMarket Shares transferred to the relevant Demerger Participant (or the Sale Agent) in accordance with this Demerger Scheme.
5.8 Dispatch of holdings statements As soon as practicable after the Implementation Date and in accordance with the Listing Rules, Westfield Corporation will procure that OneMarket Limited sends to:
(a) each Demerger Participant (other than Selling Shareholder), holding statements for the OneMarket Shares transferred to the relevant Demerger Participant; and
(b) the Sale Agent, holding statements for the OneMarket Shares transferred to the Sale Agent on behalf of the Selling Shareholder, by pre-paid post to their Registered Address at the Demerger Record Date, unless a Demerger Participant (other than a Selling Shareholder) or the Sale Agent has directed otherwise.
5.9 Share Splitting If Westfield Corporation is of the opinion, formed reasonably, that several Demerger Participants, each of which holds a holding of Westfield Shares have, before the Demerger Record Date, been party to a shareholding splitting or division in an attempt to obtain an advantage by reference to the rounding provided for in the calculation of each Demerger Participant’s entitlement to OneMarket Shares, Westfield Corporation may give notice to those Demerger Participants: (a) setting out the names and Registered Addresses of all of them;
(b) stating that opinion; and
(c) attributing to one of them specifically identified in the notice the Westfield Shares held by all of them,
and, after the notice has been so given, the Demerger Participant specifically identified in the notice shall, for the purposes of this Demerger Scheme, be taken to hold all those Westfield Shares and each of the other Demerger Participants
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whose names are set out in the notice shall, for the purposes of this Demerger Scheme, be taken to hold no Westfield Shares. 5.10 Demerger participants’ agreements Under this Demerger Scheme, each Demerger Participant irrevocably:
(a) agrees to become a member of OneMarket Limited, to have their name entered in the OneMarket Register, accepts the OneMarket Shares transferred to them and agrees to be bound by the OneMarket Constitution;
(b) agrees and acknowledges that the transfer of OneMarket Shares in accordance with clause 5.6 constitutes satisfaction of all that person’s entitlements in and to that person’s Distribution;
(c) acknowledges that the Demerger Scheme binds Westfield Corporation and all of the Scheme Participants from time to time (including those who do not attend the Demerger Scheme Meeting and those who do not vote, or vote against this Demerger Scheme, at the Demerger Scheme Meeting); and
(d) consents to Westfield Corporation and OneMarket Limited doing all things and executing all deeds, instruments, transfers or other documents as may be necessary or desirable to give full effect to this Demerger Scheme and the transactions contemplated by it.
5.11 Small Shareholders Westfield Corporation will be under no obligation to transfer, and must not transfer, any OneMarket Shares under this Demerger Scheme to any Selling Small Shareholder and, instead, clause 5.13 will apply.
5.12 Ineligible Foreign Holders Westfield Corporation will be under no obligation to transfer, and must not transfer, any OneMarket Shares under this Demerger Scheme to any Ineligible Foreign Holder and, instead, clause 5.13 will apply.
5.13 The Sale Facility In respect of each Demerger Participant which is a Selling Small Shareholder (who makes an election under clause 5.5) or an Ineligible Foreign Holder:
(a) Each Demerger Participant shall be taken to have directed Westfield Corporation to immediately transfer their entitlement to OneMarket Shares under this Demerger Scheme on the Implementation Date to the Sale Agent under the Sale Facility (and all such OneMarket Shares shall be referred to as the Sale Securities).
(b) Westfield Corporation must procure that as soon as practicable after the Implementation Date and, in any event, not more than 40 days after the ASX Listing:
(i) the Sale Agent, in consultation with OneMarket Limited, sells or procures the sale (including on an aggregated or partially aggregated basis), on a Licensed Market, of all the Sale Securities, in such manner, at such price or prices and on such other terms as the Sale Agent determines in good faith; and
(ii) remits to Westfield Corporation in Australian dollars the proceeds of the sales free of any brokerage costs or stamp duty
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(and this amount shall be referred to as the Net Sale Proceeds).
(c) Within 10 Business Days after receiving the Net Sale Proceeds in respect of the sale of all of the Sale Securities, Westfield Corporation must pay, or procure the payment, to each Selling Shareholder (in accordance with this clause 5.13) an amount calculated as follows:
A ÷ B × C Where: A = the Net Sale Proceeds; B = the total number of OneMarket Shares transferred to the Sale Agent under clause 5.13(a). C = the number of OneMarket Shares transferred to the Sale Agent under clause 5.13(a) in respect of that Selling Shareholder (which, for the avoidance of doubt, must not include a fraction of a OneMarket Share). Such payment represents each Selling Shareholder’s entitlement to part of the Net Sale Proceeds under this Demerger Scheme.
(d) None of Westfield Corporation, OneMarket Limited or the Sale Agent gives any assurance as to the price that will be achieved for the sale of Sale Securities described in clause 5.13(b). The sale of Sale Securities under this clause 5.13 will be at the risk of the Selling Shareholder.
(e) Westfield Corporation must make payments to Selling Shareholder under clause 5.13(c) by either (in the absolute discretion of Westfield Corporation):
(i) where a Selling Shareholder has, before the Demerger Record Date, made a valid election in accordance with the requirements of the Westfield Share Registry to receive payments from Westfield Corporation by electronic funds transfer to a bank account nominated by the Selling Shareholder, paying, or procuring the payment of, the relevant amount in Australian dollars by electronic means in accordance with that election;
(ii) for Selling Shareholder with a registered address in New Zealand and who have not made an election referred to in clause 5.13(e)(i), dispatching or procuring the dispatch of, a cheque for the relevant amount in New Zealand dollars to the Selling Shareholder by prepaid post to their Registered Address (as at the Demerger Record Date), such cheque being drawn in the name of the Selling Shareholder (or in the case of joint holders, in accordance with the procedures set out in clause 5.14); or
(iii) otherwise, by dispatching or procuring the dispatch of, a cheque for the relevant amount in Australian dollars to the Selling Shareholder by prepaid post to their Registered Address (as at the Demerger Record Date), such cheque being drawn in the name of the Selling Shareholder (or in the case of joint holders, in accordance with the procedures set out in clause 5.14).
(f) If Westfield Corporation receives professional advice that any withholding or other tax is required by law to be withheld from a payment to a Selling Shareholder, Westfield Corporation is entitled to withhold the
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relevant amount before making the payment to the Selling Shareholder (and payment of the reduced amount shall be taken to be full payment of the relevant amount for the purposes of this Scheme, including clause 5.13(c)). Westfield Corporation must pay any amount so withheld to the relevant taxation authorities within the time permitted by law, and, if requested in writing by the relevant Selling Shareholder, provide a receipt or other appropriate evidence of such payment (or procure the provision of such receipt or other evidence) to the relevant Selling Shareholder.
(g) Each Selling Shareholder appoints Westfield Corporation as its agent to receive on its behalf any financial services guide or other notices (including any updates of those documents) that the Sale Agent is required to provide to Selling Shareholder under the Corporations Act.
(h) Westfield Corporation, in complying with the terms of clause 5.13 in respect of a Selling Shareholder will be taken to have satisfied and discharged its obligations to the relevant Selling Shareholder under the terms of the Capital Reduction Resolution and the Demerger Scheme. A Selling Shareholder will have no claim against Westfield Corporation for any entitlement they would have had to OneMarket Shares but for the terms of this Demerger Scheme.
(i) Under this Demerger Scheme, each Selling Shareholder agrees and acknowledges that the sale in respect of that person’s Distribution under the Sale Facility or this Demerger Scheme by operation of this clause 5.13 constitutes satisfaction of all that person’s entitlements in and to that person’s Distribution.
5.14 Joint holders In the case of Westfield Shares held in joint names:
(a) any cheque required to be sent under this Demerger Scheme will be made payable to the joint holders and sent to either, at the sole discretion of Westfield Corporation, the holder whose name appears first in the Westfield Register as at the Demerger Record Date or to the joint holders;
(b) any OneMarket Shares to be transferred under this Demerger Scheme must be transferred and registered in the names of the joint holders and entry in the OneMarket Register must take place in the same order as the holders’ names appear in the Westfield Register; and
(c) any document required to be sent under this Demerger Scheme, will be forwarded to either, at the sole discretion of Westfield Corporation, the holder whose name appears first in the Westfield Register as at the Demerger Record Date or to the joint holders.
6 Dealings in OneMarket Shares 6.1 Westfield Register Subject to the Corporations Act, the Listing Rules and the Settlement Operating Rules, the establishment of who are Demerger Participants and their respective entitlements, will be determined solely on the basis of the Westfield Register.
6.2 Determination of Demerger Participants To establish the identity of the Demerger Participants, dealings in Westfield Shares will only be recognised by Westfield Corporation if:
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(a) in the case of dealings of the type to be effected using CHESS, the transferee is registered in the Westfield Register as the holder of the relevant Westfield Shares on or before the Demerger Record Date; and
(b) in all other cases, registrable transmission applications or transfers in registrable form in respect of those dealings are received on or before the Demerger Record Date at the place where the Westfield Register is kept.
6.3 No disposals after Effective Date (a) If this Demerger Scheme becomes Effective, a holder of Westfield Shares (and any person claiming through that holder) must not dispose of or purport or agree to dispose of any Westfield Shares or any interest in them after the Effective Date in any way except as set out in the Unibail-Rodamco Scheme and any such disposal will be void and of no legal effect whatsoever.
(b) Westfield Corporation will not accept for registration or recognise for any purpose any transmission, application or transfer in respect of Westfield Shares received after the Demerger Record Date (except a transfer to Unibail-Rodamco SE pursuant to the Unibail-Rodamco Scheme or any subsequent transfer by Unibail-Rodamco SE or its successors in title).
7 Power of attorney Each Demerger Participant, without the need for any further act by any Demerger Participant, irrevocably appoints Westfield Corporation and each of its directors and secretaries (jointly and each of them individually) as its attorney and agent for the purpose of:
(a) executing any document necessary or expedient to give effect to this Demerger Scheme including applying for shares in (and agreeing to become a member of) OneMarket Limited; and
(b) enforcing the Deed Poll against OneMarket Limited,
and Westfield Corporation accepts such appointment.
8 Notices 8.1 No deemed receipt If a notice, transfer, transmission application, direction or other communication referred to in this Demerger Scheme is sent by post to Westfield Corporation, it will not be taken to be received in the ordinary course of post or on a date and time other than the date and time (if any) on which it is actually received at Westfield Corporation’s registered office or at the office of the Westfield Share Registry.
8.2 Accidental omission The accidental omission to give notice of the Demerger Scheme Meeting or the non-receipt of such a notice by any Westfield Shareholder will not, unless so ordered by the Scheme Court, invalidate the Demerger Scheme Meeting or the proceedings of the Demerger Scheme Meeting.
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9 General Demerger Scheme provisions 9.1 Instructions to Westfield Corporation Except for a Demerger Participant’s tax file number, binding instructions or notifications between a Demerger Participant and Westfield Corporation relating to Westfield Shares or a Demerger Participant’s status as a Westfield Shareholder (including, without limitation, any instructions relation to payment of amounts or communications from Westfield Corporation) will (to the extent permitted by law), from the Demerger Record Date, be deemed by reason of this Demerger Scheme to be similarly binding instructions or notifications to, and accepted by, OneMarket Limited in respect of the OneMarket Shares transferred to Demerger Participants until those instructions or notifications are, in each case, revoked or amended in writing addressed to OneMarket Limited at its share registry.
9.2 Variations, alterations and conditions Westfield Corporation may, with the consent of OneMarket Limited, by its counsel or solicitor consent on behalf of all persons concerned to any variations, alterations or conditions to this Demerger Scheme which the Scheme Court thinks fit to impose.
9.3 Further action by Westfield Corporation Westfield Corporation will execute all documents and do all things (on its own behalf and on behalf of each Demerger Participant) necessary or expedient to implement, and perform its and each Demerger Participant’s obligations under, this Demerger Scheme.
9.4 No liability when acting in good faith Neither Westfield Corporation nor OneMarket Limited, nor any of their respective officers, will be liable for anything done or omitted to be done in the performance of this Demerger Scheme in good faith.
9.5 Enforcement of Deed Poll Westfield Corporation undertakes in favour of each Demerger Participant to enforce the Deed Poll against OneMarket Limited on behalf of and as agent and attorney for the Demerger Participants.
9.6 Demerger Scheme binding To the extent of any inconsistency between this Demerger Scheme and the Westfield Constitution, this Demerger Scheme overrides the Westfield Constitution and binds Westfield Corporation and all Demerger Participants.
10 Governing law 10.1 Governing law and jurisdiction The law in force in the place specified in the Details governs this document. Westfield Corporation submits to the non-exclusive jurisdiction of the courts of that place.
10.2 Serving documents Without preventing any other method of service, any document in an action in connection with this document may be served on a party by being delivered or left at that party’s address set out in the Details.
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PAGE 184 // WESTFIELD CORPORATION PROPOSAL CORPORATE DIRECTORY
Westfield Westfield Corporation Westfield Corporation Limited ABN 12 166 995 197 Registered Office Level 29 85 Castlereagh Street Sydney NSW 2000 Telephone: +61 2 9273 2000 Facsimile: +61 2 9357 7131 Auditor Ernst & Young The Ernst & Young Centre 200 George Street Sydney NSW 2000 Westfield Australian legal adviser King & Wood Mallesons Level 61 Governor Phillip Tower 1 Farrer Place Sydney NSW 2000 Independent Expert Grant Samuel & Associates Pty Limited ABN 28 050 036 372, AFSL No. 240985 Level 19 Governor Macquarie Tower 1 Farrer Place Sydney NSW 2000 Investigating Accountant Ernst & Young Transaction Advisory Services Limited ABN 87 003 599 844, AFSL No. 240585 200 George Street Sydney NSW 2000 Westfield Registry Computershare Investor Services Pty Limited Level 4, 60 Carrington Street Sydney NSW 2000 Shareholder Information Line 1300 132 211 (within Australia) +61 3 9415 4070 (outside Australia) Website www.westfieldcorp.com WESTFIELD CORPORATION PROPOSAL FOR THE DEMERGER OF ONEMARKET LIMITED FROM WESTFIELD CORPORATION
www.westfieldcorporation.com WESTFIELD CORPORATION PROPOSAL FOR THE DEMERGER OF ONEMARKET LIMITED FROM WESTFIELD CORPORATION Proxy Form. A replypaidenvelope isincludedwiththeNotice ofMeetingandthis The proxy form may belodgedwithComputershare(detailsabove). of aProxyLodgement Corporation Limited. A proxy neednotbeasecurityholderof Westfi percentage ofvotes for ornumber ofsecurities eachinStep1overleaf. the votes. When appointingasecondproxy bothnamesandthe write forsecurities eachproxy, otherwiseeachproxy may exercise halfof proxies you must specify thepercentageofvotes ornumber of proxies toattendthemeetingandvote onapoll. Ifyou appointtwo Appointing asecondproxy: You areentitledtoappointuptwo cast must notexceed your voting entitlementor100%. vote intheFor, AgainstorAbstainbox orboxes. The sumofthevotes you thepercentageornumber ofsecurities wishto byrights inserting Voting ofyour ofyour voting aportion holding:Indicateaportion vote willbeinvalid onthatitem. extent by law). permitted Ifyou morethanonebox mark onanitemyour aboxnot mark your proxy may vote orabstain asthey choose(tothe oneoftheboxesmarking oppositeeachitemofbusiness. Ifyou do Voting 100%ofyour holding:Directyour proxy how tovote by Appointment ofProxy All your willbevoted securities inaccordance withyour directions. How to Vote onItemsofBusiness Proxy Form-DemergerSchemeMeeting(DemergerofOneMarket) PLEASE NOTE: thatyou keep For reasonsitisimportant your security SRN/HINconfi dential. SRN/HIN: Control Number: Your accessinformation thatyou your willneedtolodge proxy: For your vote tobeeffective itmust bereceivedby 11.00am(Sydney time)on Tuesday, 22May 2018 Westfield Corporation Limited • • Scheme MeetingandDemerger Booklet yourLodge proxy onlineorview theNoticeofDemerger Follow onthesecurewebsite tolodgeyour theinstructions proxy. Go towww.investorvote.com.au orscantheQRCodewithyour mobiledevice. ABN 12 166995197 ABN eld or turn over tocomplete theform GO ONLINE TO LODGE YOUR PROXY, with thisform. return for thecompany, themonaseparate sheetofpaperand pleasewrite Comments &Questions:Ifyou have any commentsorquestions under thehelptab, “Printable Forms”. obtained fromComputershare oronlineatwww.investorcentre.com Representative” toadmission. prior Aform ofthecertifi cate may be provide theappropriate “Certifi cate ofAppointmentCorporate orproxysecurityholder istoattendthemeetingyou will needto thisform toassistregistration.Bring Ifarepresentative ofacorporate Attending theDemerger Scheme Meeting placetoindicatetheoffiappropriate ce held. Deletetitlesasapplicable. either anotherDirectororaCompany Secretary. Pleasesigninthe alone. Otherwisethisform must besignedby aDirectorjointlywith does nothave aCompany Secretary, aSoleDirectorcanalsosign Act2001) the company (pursuanttosection204AoftheCorporations Sole Company Secretary, thisform must besignedby thatperson. If Companies: Where thecompany hasaSoleDirectorwhoisalsothe Power tothisformit. ofAttorney whenyou return withtheregistry,Attorney pleaseattachacertifi ed photocopy ofthe Power ofAttorney: Ifyou have notalreadylodgedthePower of must sign. securityholders Joint Holding: Wheretheholdingisinmorethanonename, allofthe must sign. Individual: Signing Instructionsfor Postal Proxy Forms Where theholdingisinonename, thesecurityholder (outside Australia) +61394154070 (within Australia) 1300132211 For allenquiriescall: yourLodge proxy: (custodians) www.intermediaryonline.com only Onlinesubscribers For Intermediary (outside Australia) +61394732555 (within Australia) 1800783447 Alternatively you canfax your form to Sydney NSW2000Australia Level Street 4,60Carrington Computershare Investor PtyLimited Services Share Registry In Person: 3001AustraliaVictoria GPO Box 1282Melbourne Computershare Investor PtyLimited Services By Mail: www.investorvote.com.au Online:
236865_022GWE STEP 2 STEP 1 SIGN Chairman oftheDemergerSchemeMeetingmayChairman changehisvoting intentiononany resolution,inwhich caseanASXannouncementwill bemade. oftheDemergerSchemeMeetingintendstovoteThe Chairman undirected proxies infavour ofeachitembusiness. Inexceptional circumstances, the as theUnibail-Rodamco Transaction orpostponementofthatDemergerSchemeMeeting. Meetingsconclude),andatany adjournment Centennial Hall,Sydney Town Hall,483GeorgeStreet,Sydney NSW2000on Thursday, 24May 2018at11.00am(Sydney time)(oras soon thereafter given, andtotheextent by law, permitted astheproxy seesfi t) attheDemergerSchemeMeetingof Westfi Limitedtobeheldat eld Corporation my/our proxy toactgenerally atthemeetingonmy/our behalfandtovote inaccordancewiththefollowing directions(orifno directionshave been oftheDemergerSchemeMeeting,as isnamed,theChairman or failing named,orifnoindividualbodycorporate theindividualorbodycorporate Westfi of amember/s being I/We WFD Proxy Form Name Contact Sole DirectorandCompany Secretary Individual orSecurityholder1 Corporation is authorised toimplementtheDemergerSchemewithany isauthorised suchmodifiCorporation cations orconditions and,subjecttoapprovalby theboardofdirectors theSchemeCourt oftheschemeby theSchemeCourt, Westfi (b) thedirectorsof Westfi toagree tosuchalterations areauthorised orconditionsasarethoughtfi eld Corporation intheDemergerBookletaccompanying described thenoticeconvening thismeeting,isagreedparticularly to; and (a) thearrangement proposedbetween Westfi and eld Corporation Westfi eld Shareholders, ascontainedinandmore Act2001(Cth): That, inaccordancewiththeprovisions ofsection411theCorporations Scheme Meeting the Demerger the Chairmanof Items ofBusiness Appoint aProxy to Vote on Your Behalf Signature ofSecurityholder(s) OR eld Corporation Limited hereby appoint hereby Limited Corporation eld Director Securityholder 2 behalf onashow ofhandsorapollandyour votes willnotbecountedincomputingthe requiredmajority. PLEASE NOTE: Ifyou the Abstain box mark for anitem,you aredirectingyour proxy nottovote onyour
This sectionmust becompleted. advise your broker of any changes. advise yourbrokerofanychanges. commences with‘X by abroker(referencenumber left. Securityholderssponsored correction inthespaceto mark thisboxandmakethe Change ofaddress.Ifincorrect, Telephone Daytime Contact ’) should ’) should Please mark Director/Company Secretary Securityholder 3 t eld your own name(s). Demerger SchemeMeeting. Donotinsert you have ofthe selectedtheChairman PLEASENOTE:Leave thisbox blank if toindicateyour directions Date For
/ / Against
Abstain
236865_022GWE Proxy Form. A replypaidenvelope isincludedwiththeNotice ofMeetingandthis The proxy form may belodgedwithComputershare(detailsabove). of aProxyLodgement Corporation Limited. A proxy neednotbeasecurityholderof Westfi percentage ofvotes for ornumber ofsecurities eachinStep1overleaf. the votes. When appointingasecondproxy bothnamesandthe write forsecurities eachproxy, otherwiseeachproxy may exercise halfof proxies you must specify thepercentageofvotes ornumber of proxies toattendthemeetingandvote onapoll. Ifyou appointtwo Appointing asecondproxy: You areentitledtoappointuptwo cast must notexceed your voting entitlementor100%. vote intheFor, AgainstorAbstainbox orboxes. The sumofthevotes you thepercentageornumber ofsecurities wishto byrights inserting Voting ofyour ofyour voting aportion holding:Indicateaportion your vote willbeinvalid onthatitem. extent by law). permitted Ifyou morethanonebox mark onanitem aboxmark your proxy may vote orabstain asthey choose(tothe oneoftheboxesmarking oppositetheitemofbusiness. Ifyou donot Voting 100%ofyour holding:Directyour proxy how tovote by Appointment ofProxy All your willbevoted securities inaccordance withyour directions. How to Vote onItemsofBusiness Proxy Form-GeneralMeeting(DemergerofOneMarket) PLEASE NOTE: thatyou keep For reasonsitisimportant your security SRN/HINconfi dential. SRN/HIN: Control Number: Your accessinformation thatyou your willneedtolodge proxy: For your vote tobeeffective itmust bereceivedby 11.00am(Sydney time)on Tuesday, 22May 2018 Westfield Corporation Limited • • Meeting andDemerger Booklet yourLodge proxy onlineorview theNoticeofGeneral Follow onthesecurewebsite tolodgeyour theinstructions proxy. Go towww.investorvote.com.au orscantheQRCodewithyour mobiledevice. ABN 12 166995197 ABN eld or turn over tocomplete theform GO ONLINE TO LODGE YOUR PROXY, with thisform. return for thecompany, themonaseparate sheetofpaperand pleasewrite Comments &Questions:Ifyou have any commentsorquestions under thehelptab, “Printable Forms”. obtained fromComputershare oronlineatwww.investorcentre.com Representative” toadmission. prior Aform ofthecertifi cate may be provide theappropriate “Certifi cate ofAppointmentCorporate orproxysecurityholder istoattendthemeetingyou will needto thisform toassistregistration.Bring Ifarepresentative ofacorporate Attending theGeneralMeeting placetoindicatetheoffiappropriate ce held. Deletetitlesasapplicable. either anotherDirectororaCompany Secretary. Pleasesigninthe alone. Otherwisethisform must besignedby aDirectorjointlywith does nothave aCompany Secretary, aSoleDirectorcanalsosign Act2001) the company (pursuanttosection204AoftheCorporations Sole Company Secretary, thisform must besignedby thatperson. If Companies: Where thecompany hasaSoleDirectorwhoisalsothe Power tothisformit. ofAttorney whenyou return withtheregistry,Attorney pleaseattachacertifi ed photocopy ofthe Power ofAttorney: Ifyou have notalreadylodgedthePower of must sign. securityholders Joint Holding: Wheretheholdingisinmorethanonename, allofthe must sign. Individual: Signing Instructionsfor Postal Proxy Forms Where theholdingisinonename, thesecurityholder (outside Australia) +61394154070 (within Australia) 1300132211 For allenquiriescall: yourLodge proxy: (custodians) www.intermediaryonline.com only Onlinesubscribers For Intermediary (outside Australia) +61394732555 (within Australia) 1800783447 Alternatively you canfax your form to Sydney NSW2000Australia Level Street 4,60Carrington Computershare Investor PtyLimited Services Share Registry In Person: 3001AustraliaVictoria GPO Box 1282Melbourne Computershare Investor PtyLimited Services By Mail: www.investorvote.com.au Online:
236865_022GUE STEP 2 STEP 1 SIGN General Meeting may changehisvoting intentiononany resolution,inwhichcaseanASXannouncementwillbemade. oftheGeneral MeetingintendstovoteThe Chairman undirectedproxies infavour ofeachitembusiness. Inexceptional ofthe circumstances, theChairman Transaction orpostponementofthatGeneral Meetingsconclude),andatanyMeeting. adjournment Hall, 483GeorgeStreet,Sydney NSW2000on Thursday, 24May 2018at11.00am(Sydney time)(orassoonthereaftertheUnibai the extent by law, permitted astheproxy seesfi t) attheGeneral Meetingof Westfi LimitedtobeheldatCentennialHall,Sydney eld Corporation Town to actgenerally atthemeetingonmy/our behalfandtovote inaccordancewiththefollowing directions(orifnohave beengiven, andto oftheGeneral Meeting, asmy/our isnamed,theChairman proxyor failing named,orifnoindividualbodycorporate theindividualorbodycorporate Westfi of amember/s being I/We WFD Proxy Form Name Contact Sole DirectorandCompany Secretary Individual orSecurityholder1 Demerger RecordDate(roundedtothenearestAustralian cent)inaccordancewiththeDemergerScheme. satisfi ed by applyingtheCapitalReductionAggregate Amountequallyagainsteach Westfi eld Shareonissuethe Capital ReductionAggregate Amount(asdefi ned inthe DemergerScheme),withthereductiontobeeffected and other purposes, Westfi eld Corporation’s sharecapitalbereducedontheDemergerImplementationDateby the Actandfor Actandforofsection256C(1)theCorporations all section 411(10)oftheCorporations thepurpose which thenoticeconvening (“Demerger Scheme”) becomingEffective this meetingforms part inaccordancewith That, subjecttoandconditionalontheschemeofarrangement setoutinAnnexure EoftheDemergerBooklet General Meeting the Chairmanof Items ofBusiness Appoint aProxy to Vote on Your Behalf Signature ofSecurityholder(s) OR eld Corporation Limited hereby appoint hereby Limited Corporation eld Director Securityholder 2 behalf onashow ofhandsorapollandyour votes willnotbecountedincomputingthe requiredmajority. PLEASE NOTE: Ifyou the Abstain box mark for anitem,you aredirectingyour proxy nottovote onyour
This sectionmust becompleted. advise your broker of any changes. advise yourbrokerofanychanges. commences with‘X by abroker(referencenumber left. Securityholderssponsored correction inthespaceto mark thisboxandmakethe Change ofaddress.Ifincorrect, Telephone Daytime Contact ’) should ’) should Please mark Director/Company Secretary Securityholder 3 Meeting. your own name(s). Donotinsert have oftheGeneral selectedtheChairman PLEASENOTE:Leave thisbox blank ifyou toindicateyour directions Date For
/ / Against
Abstain l-Rodamco
236865_022GUE